Oracle Tuesday announced it will buy a majority stake in Indian banking software vendor i-flex Solutions, the latest in a string of acquisitions designed to strengthen the U.S. company's applications business.

Oracle plans to acquire 61% of i-flex: 41% from Citigroup's venture capital unit and 20% from public shareholders. The database and business software company expects the transaction to close by year -end subject to regulatory approvals, it said in a statement.

The total value of the deal could reach $909 million, Oracle CFO Greg Maffei said in a conference call.

It is Oracle's latest move to expand beyond general purpose ERP applications and into more industry specific software. The move follows its acquisitions of retail software vendors Retek and ProfitLogic.

A deal with i-flex was rumored to be in the works last week. At the time, analysts said the acquisition would be significant for Oracle, which wants to compete better with ERP market leader SAP AG in the finance, telecommunications and retail sectors.

"These sectors are some of the most information-intensive, and typically have amongst the highest IT spend. Without such vertical capability, Oracle will not be able to grow its applications business as well as it should," according to U.K. analyst company Ovum.

I-flex's software is used for corporate and consumer banking, investment banking, Internet banking, asset management and investor services. Based in Mumbai (formerly known as Bombay), i-flex provides software to 575 banks in 115 countries, according to Oracle.

The current i-flex management team will continue to run the business, aligning its product development and marketing with Oracle's goals. Charles Phillips, an Oracle co-president, will take a seat on the i-flex board. I-flex shares will continue to trade on the Bombay Stock Exchange and the National Stock Exchange of India.

Oracle decided to keep i-flex independent in order to help attract talented staff and minimize integration issues, Phillips said. Oracle does not plan to buy the 39% of i-flex that will remain publicly traded, Phillips said.

I-flex had revenue of $261 million for the year to March 31, up 42% from the year before, and net income of $46 million, Phillips said. It has more than 4,700 employees and wholly owned subsidiaries in the Netherlands, Singapore and the U.S., according to its Web site.

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