Oracle, the world's second largest software maker is going to sell its software services unit.
As reported in the Economic Times India, the company has already started negotiations with potential investors and bidders. The report cites “three people familiar with the process,” though it doesn't name any sources.
Oracle Financial Services Software, previously known as the i-Flex solution before it was acquired in 2005, earns the company over fifty percent of its total revenues- primarily from the sales of its specialised banking software product called Flexcube.
Although there is no overriding reason to get rid of the software unit, insiders say that there is no synergy between the companies different units. Since Oracle is not under any pressure to sell, it's possible that they will not be able to find a buyer willing to pay the units full market value. According to market estimations, the deal could be worth as much as $400-$500 million.
Also, there are reports that Oracle has approached investment bank Credit Sussie to facilitate the sale of its software services unit.
The bank had advised Oracle in 2005 to purchase PeopleSoft for an amount close to the $10 billion. Oracle has yet to confirm the possible deal.