June 20, 2012
SAP Expands Cloud Presence with $4.3 Billion Acquisition of Ariba
SAP offered $45 a share for Ariba, a transaction that was unanimously approved by the Ariba board of directors. The per share purchase price is a 20 percent premium over the May 21 closing price and a 19 percent premium over the one month volume weighted average price per share, SAP officials said.
The acquisition, which is expected to close in the third quarter, will ultimately blend Ariba's extensive buyer-seller collaboration network with SAP's global customer base of 190,000 to create new models for business-to-business collaboration in the cloud, positioning SAP in a fast-growing market as buyers and sellers tap into the cloud. Industry experts estimate the cloud-based enterprise network and procurement segment at a current size of $5 billion in revenue.
"The cloud has profoundly changed the way people interact. The impact will be even greater as enterprises connect and collaborate in new ways with their global networks of customers and partners," SAP Co-CEOs Bill McDermott and Jim Hagemann Snabe, said in a company statement. "Cloud-based collaboration is redefining business network innovation, and we are catching this wave in the early stage of its evolution. The addition of Ariba will create the business network of the future, deliver immediate value to our customers and provide another solid engine for driving SAP's growth in the cloud."
SAP's acquisition of Ariba accelerates its momentum in the cloud. Last week, SAP announced the roadmap for its cloud applications business, focusing on managing customers, suppliers, employees, and financials, in addition to its cloud suite offerings SAP Business ByDesign and SAP Business One. Company officials said the acquisition will also significantly boost SAP's cloud applications portfolio with the addition of Ariba's cloud-based procurement solutions.
Ariba, which is based in Sunnyvale, Calif., has approximately 2,600 employees and $444 million in total revenue. The Ariba network comprises more than $319 billion in commerce transactions, collaborations, and intelligence among more than 730,000 companies.
Upon completion of the transaction, the companies said they plan to consolidate all cloud-related supplier assets of SAP under Ariba. The existing management team will continue to lead Ariba, which will operate as an independent business under the name "Ariba, an SAP company."
The SAP executive board intends to nominate Ariba CEO Bob Calderoni to the SAP global managing board after closing of the transaction and subject to the approval of the SAP supervisory board.
The acquisition, which is expected to close in the third quarter, will ultimately blend Ariba's extensive buyer-seller collaboration network with SAP's global customer base of 190,000 to create new models for business-to-business collaboration in the cloud, positioning SAP in a fast-growing market as buyers and sellers tap into the cloud. Industry experts estimate the cloud-based enterprise network and procurement segment at a current size of $5 billion in revenue.
"The cloud has profoundly changed the way people interact. The impact will be even greater as enterprises connect and collaborate in new ways with their global networks of customers and partners," SAP Co-CEOs Bill McDermott and Jim Hagemann Snabe, said in a company statement. "Cloud-based collaboration is redefining business network innovation, and we are catching this wave in the early stage of its evolution. The addition of Ariba will create the business network of the future, deliver immediate value to our customers and provide another solid engine for driving SAP's growth in the cloud."
SAP's acquisition of Ariba accelerates its momentum in the cloud. Last week, SAP announced the roadmap for its cloud applications business, focusing on managing customers, suppliers, employees, and financials, in addition to its cloud suite offerings SAP Business ByDesign and SAP Business One. Company officials said the acquisition will also significantly boost SAP's cloud applications portfolio with the addition of Ariba's cloud-based procurement solutions.
Ariba, which is based in Sunnyvale, Calif., has approximately 2,600 employees and $444 million in total revenue. The Ariba network comprises more than $319 billion in commerce transactions, collaborations, and intelligence among more than 730,000 companies.
Upon completion of the transaction, the companies said they plan to consolidate all cloud-related supplier assets of SAP under Ariba. The existing management team will continue to lead Ariba, which will operate as an independent business under the name "Ariba, an SAP company."
The SAP executive board intends to nominate Ariba CEO Bob Calderoni to the SAP global managing board after closing of the transaction and subject to the approval of the SAP supervisory board.