An Orcale (ORCL) Takeover of Netsuite (N) Unlikely to Create Meaningful Synergies - SunTrust

(Updated - July 12, 2016 3:32 PM EDT)

Analyst John Rizzuto at SunTrust Robinson Humphrey raised doubt about rumors in the market Tuesday that Orcale (NASDAQ: ORCL) would target Netsuite (NYSE: N) in a merger. Today's unsubstantiated rumors pushed shares of Netsuite up over 12%.

Rizzuto notes the rumors originated at Proactive Investors today but also notes that the website reported a similar story on June 28th.

The analyst said while an Oracle acquisition cannot be ruled out and makes sense for revenue consolidation, it "does little to change the market landscape, the effectiveness, or growth trajectory of either organization."

Rizzuto notes Oracle and NetSuite solutions could be integrated rather straightforwardly, but it would "take a Herculean effort to move NetSuite to Oracle's Fusion platform."

The analyst said they would not expect the combination of these companies to create any meaningful technology/product synergies. "While there are some areas where NetSuite’s functionality could fill gaps in Oracle’s portfolio and vice versa, we do not view these as meaningful," he added.

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