- Technology giant Oracle announced on Monday it has struck a deal to buy Opower, a major provider of cloud-based energy efficiency and customer engagement software to utilities, according to a release.
- Oracle will pay $10.30 per share in cash for Opower, which is about a 30% premium on Opower's stock's closing price on Friday. The deal is valued by Oracle at $532 million.
- Opower's board of directors has approved the transaction. Oracle expects the deal to close this year.
Today's announcement brings an end to Opower's rollercoaster startup story.
Regarded in the tech press as the darling of the emerging energy efficiency software space, Opower was started in 2007 as Positive Energy by Dan Yates and Alex Laskey. At the time, the mission was to create a better utility bill.
That mission evolved over the years, with the company rebranding in 2009. Opower aimed to bring behavioral science to energy efficiency and demand response, encouraging utility customers to save energy through personalized energy reports that compared energy usage to their peers. Unlike other early energy efficiency startups, Opower worked within the existing utility model and gained partnerships with a number of leading utilities, including National Grid and Pacific Gas & Electric.
Opower held its initial public offering (IPO) in April 2014, debuting at $25. However, Opower's IPO may have been its high point. The company struggled since then, with high R&D and marketing costs dragging down its bottom line as it sought to chart into a new areas, like customer care. While Opower expanded existing partnerships with utilities like National Grid, it recently laid off 7.5% of its workforce after announcing another loss in its latest quarterly earnings report. Opower shares, which were trading at less than $8 on Friday, rose 30% to over $10 upon news of the deal with Oracle.
Today, Opower claims over 100 utility partners worldwide that serve 60 million consumers. For Oracle, the deal will provide the technology company with Opower's suite of cloud-based energy efficiency and customer engagement software, adding to Oracle's existing software offerings to utilities.
"Together, Oracle and Opower will provide the industry with the most complete, modern and integrated cloud platform for the entire utility value chain, from meter to grid to end-customers," Rodger Smith, senior vice president and general manager of Oracle Utilities Global Business Unit, wrote in a letter to customers and partners.