Expanding SAP's presence in cloud with e-commerce vendor purchase
SAP AG said it would buy smaller software maker Ariba Inc for $45 a share, representing an enterprise value of about $4.3 billion, the latest in a string of acquisitions to help fuel revenue growth at the German technology company.
Ariba shares were about up about 19.2 percent to $44.88 on Nasdaq on Tuesday. Ariba shares had been halted prior to the announcement.
Ariba's platform focuses on business-to-business commerce transactions. It makes a natural fit with SAP's "broad customer base and deep business process expertise," SAP said in a statement.
Ariba's network will grow to more than 1 million companies this year,
SAP co-CEO Bill McDermott said during a conference call with media and
analysts. "The growth opportunity in this arena is huge," he said.
SAP plans to keep Ariba's system open to other platforms, allowing
customers to tap it from "any source system," according to McDermott.
"All those companies that are not using SAP need not worry," he said.
Ariba's trading network and procurement applications would also
complement SAP's cloud-based ERP (enterprise resource planning) suite
Business ByDesign, as well as the Business One application for smaller
companies, McDermott said.
Online trading networks like Ariba's "take the guesswork out of
finding the best business partner" and make those interactions more
efficient, SAP co-CEO Jim Hagemann Snabe said during the call.
SAP plans to utilize both the Crossgate and Ariba technology platforms,
Snabe said, although he didn't provide specifics. It also plans to bring
its HANA in-memory database into Ariba's technology stack, as well as
analytics. The latter combination will help customers better understand
their spending and supplier relations, according to Snabe.
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