Oracle has agreed to acquire a majority stake in I-Flex Solutions, India's largest applications developer. The company specialises in software for the banking industry, and rumours of the deal have been circulating for the past week.
The transaction is the latest in a series of acquisitions by Oracle, which is working to strengthen its applications business.
The addition of I-Flex fits Oracle's growth strategy, according to chief executive Larry Ellison. "Banking is a strategic industry for Oracle with nine of the top 10 banks already running Oracle ERP applications," he said.
"Oracle's overall application strategy is to go beyond ERP and offer customers richer industry-specific functionality. I-Flex gets us there in banking."
The database vendor will acquire a 41 per cent stake in I-Flex from Citigroup Venture Capital International. Indian law requires Oracle to make an open bid for the remaining 20 per cent of outstanding shares in the public market.
The deal could cost up to $909m, depending on the number of shares tendered. Oracle has no plans to acquire the remaining 39 per cent of the company's shares.
I-Flex reported revenues of $261m in its most recent fiscal year and posted $46m income. The company employs 4,700 workers.
Oracle co-president Charles Philips said in a conference call that the firm will keep I-Flex as an independent unit, allowing it to attract talent and minimise integration issues.
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