Oracle said it will combine Hyperion's software with its own business intelligence and analytics tools to offer customers a broad range of performance management capabilities, including planning, budgeting and operational analytics.
The deal, the latest major purchase by Oracle following its acquisitions of applications vendors PeopleSoft, Siebel Systems, Retek and others, will expand Oracle's portfolio of database, applications and middleware products with a set of business intelligence products.
While Oracle continues to expand its customer base through big acquisitions, the deal will reopen concerns about the challenge of integrating another large company into a business that is still absorbing the products and employees of earlier purchases.
The companies hope to close the acquisition by April, subject to customary closing conditions. Oracle has agreed to pay $52 per share for Hyperion, or about $3.3 billion, a premium of 21 percent over Hyperion's closing share price on Wednesday.
Part of Oracle's motivation for the deal appears to be to poach customers from its chief applications rival SAP: Many SAP customers use Hyperion software, and the acquisition will bring them closer to Oracle, said Oracle President Charles Phillips in a statement.
Hyperion has 12,000 customers using its software, and about 2,500 employees spread over 20 countries, according to information on its Web site. It reported revenue of $765.2 million for the fiscal year to June 30, 2006.
Earlier this year Oracle was rumoured to have been in acquisition talks with Hyperion rival Business Objects.
In the past, Oracle executives have discussed improving the business intelligence capabilities in its Oracle database, and buying Hyperion could potentially give the company a selling point over database rival IBM. Hyperion is among IBM's business intelligence partners.
IBM is also close partners with Business Objects and is developing new products that integrate its data warehousing software with Business Objects' products, sources familiar with those plans said this week. IBM also has a relationship with open-source BI vendor Pentaho.
The acquisition will be at least the 27th deal Oracle has announced since the start of 2005.