German business-management software giant SAP SE said it reached an agreement over the acquisition of Concur Technologies Inc. in a push to boost its cloud-computing operations.
“The acquisition of Concur is consistent with our relentless focus on the business network,” said Bill McDermott, SAP chief executive, in the companys statement. “We are making a bold move to innovate the future of business within and between companies. With Ariba, Fieldglass and Concur, SAP is the undisputed business network company.”
According to SAPs statement, the price SAP is to pay for Concur is estimated at $129 per share, which represents a 20% premium over the September 17 closing price, a 21% premium over the one-month volume weighted average price per share and an enterprise value of approximately $8.3 billion. The Germany-based company revealed that the acquisition is planned to be funded from a credit line that amounts to about €7 billion ($9 billion).
According to Dealogic, the deal is the biggest one in SAPs history and surpasses even the $7.1-billion purchase of Sybase Inc. four years ago. In addition, Dealogic ranks the acquisition among the 10 biggest deals in the software sector, along with the deal between Hewlett-Packard Co. and Autonomy Corp., which amounted to $11.7 billion and Oracle Inc.s acquisition of PeopleSoft Inc. at the price of $10 billion.
The purchase of Concur comes at a moment when the Germany-based company is trying to reorganize its software business and push into cloud-computing data services. Concur is known for providing software oriented towards helping companies manage the travel and expense accounts of their employees. The service is delivered via the Internet.
“There’s no debate anymore in the IT industry that the cloud will be the preferred consumption model,” Bernd Leukert, SAP’s software chief, said last month in an interview, which was cited by Bloomberg.
Over the last four years SAP has spent more than $13 billion on purchases, including suppliers of Web-delivered software. The company has been facing slowing sales growth as it evolved to a cloud-based business software provider.
Steve Singh, CEO of Concur, said: “We have always been focused on making solutions for real customer problems, and with SAP we have a great opportunity to advance that mission. We are constantly seeking innovative ways to deliver the best customer experience and we’re excited about leveraging SAP technology.”
SAP SE fell by 2.22% by 08:26 GMT in Frankfurt to trade at €58.56 per share, marking a one year change of +5.32%. The software giant is valued at €73.58 billion. According to the Financial Times, the 32 analysts offering 12-month price targets for SAP SE have a median target of €65.00, with a high estimate of €88.00 and a low estimate of €45.00. The median estimate represents a 8.53% increase from the previous close of €59.89.
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