This was published 6 years ago
Oracle to buy Melbourne company founded over squash game for $1.6b
By Cara Waters
US software giant Oracle has made a $1.56 billion offer to buy a Melbourne construction management software business founded by two school friends over a game of squash.
ASX-listed Aconex said on Monday its directors had unanimously recommended the $7.80-a-share offer, which represents a 47.4 per cent premium to Friday's closing price of $5.29.
Aconex founders Leigh Jasper and Rob Phillpot often discussed how the internet could improve organisations' management and storage of large amounts of information over weekly squash games.Credit: Gary Medlicott
Leigh Jasper and Rob Phillpot founded the business, which digitally connects owners, builders and other teams to manage data, documents and costs across all stages of a construction project, in 2000.
Mr Jasper ,who is Aconex's chief executive, will stay on under the terms of the deal.
From weekly games to start-up
Mr Jasper grew up in Rutherglen and Mr Phillpot in Warrnambool and the high school friends regularly caught up over weekly squash games.
These games often included discussions about how the internet could improve organisations' management and storage of large amounts of information.
At the time, Mr Jasper was a management consultant at McKinsey and Mr Phillpot was a project manager at Multiplex Constructions.
The pair decided to take the leap, leaving their secure jobs for the uncertainty of building their own business.
"We didn't know what we didn't know - we just did it," Mr Jasper told Fairfax Media in a 2007 interview.
"If we knew more, maybe we would have hesitated. We took the approach that we would make mistakes, learn from them and move forward."
Aconex CEO Leigh Jasper: Shareholders of the cloud solutions provider are scheduled to vote on the offer at a scheme meeting in March.Credit: Simon Schluter
Global business
Mr Jasper and Mr Philpott had a global outlook from the start.
"We've always had a vision," Mr Jasper said. "It was never just Australia; we've always had our sights on taking the business internationally."
Aconex built up a customer base of 70,000 user organisations in over 70 countries and has been used to manage more than $1 trillion in projects.
In 2014, it listed on the Australian Securities Exchange in a $312 million public listing.
Monday's takeover bid by Oracle was heralded by Atlassian co-founder Mike Cannon-Brookes as a "big win for Aussie tech".
Mr Cannon-Brookes tweeted his congratulations to Mr Jasper and Mr Philpott on Monday, praising "a colossal journey of 17 years".
"And to local fundies who don’t believe in tech, 47 per cent premium will hurt a lot?," he tweeted.
Mr Cannon-Brookes noted Aconex was the 10th most-shorted stock on the ASX, with about 10 per cent of stock sold short.
In early trade on Monday, the shares were up 44 per cent at $7.62.
A larger scale
Mr Jasper said he and Mr Phillpot were excited by the opportunity to advance their collective vision on a larger scale through the Oracle deal.
“The Aconex and Oracle businesses are a great, natural fit and highly complementary in terms of vision, product, people and geography,” Mr Jasper said in a statement on Monday.
“As co-founders of Aconex, both Rob Phillpot and I remain committed to the business and are excited about the opportunity to advance our collective vision on a larger scale, and the benefits this combination will deliver to our customers.”
"With the addition of Aconex, we significantly advance our vision of offering the most comprehensive cloud-based project management solution for this $US14 trillion industry," said Mike Sicilia, Oracle's senior vice-president and general manager for its construction and engineering global business arm, said in a statement.
Shareholders at Aconex are scheduled to vote on the offer at a scheme meeting in March.
Oracle's offer has been unanimously recommended by Aconex directors.Credit: Bloomberg
Credit Suisse is acting as Aconex's financial adviser while Herbert Smith Freehills is acting as its legal adviser.
In a letter to customers and partners, Mr Jasper said the transaction was expected to close in the first half of 2018, subject to Aconex shareholder and other approvals. It would be "business as usual" until then.
Mr Phillpot previously told Fairfax a key lesson in squash was to "position yourself well and you'll win".
It's a lesson the pair have taken to heart in building Aconex into an international success.