The price on the blockbuster Oracle deal for Siebel works out to around 3.7-times sales for the CRM company, a fairly steep price, me-thinks, for a moribund enterprise software company growing under 5% a year. But when you factor in Siebel’s $4.29 in cash per share then you have the price drop to under twice sales, and even less on next year’s sales. While that’s still no steal, it at least makes the deal palatable.
On a related note, this deal sure seems to have been widely tipped. Siebel’s shares traded up on persistent rumors last Friday, making it clear that someone who knew was saying more than they should. And Larry Ellison himself made clear that this sort of thing was likely in a nicely-done Matthew Symonds profile in the current Vanity Fair (the one with a topless Paris Hilton on the cover — yes, I closed my eyes and bought it, suffering for my readers).