SAP to buy Ariba for $4.3 billion

23 May 2012

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23 May 2012 | Adam Leach

Technology firm SAP is to buy spend management software firm Ariba for around $4.3 billion (£2.73 billion) after its offer was given unanimous approval by Ariba’s board of directors.

The deal, valuing the company at $45 (£28.6) per share, will allow SAP to boost the cloud computing e-procurement products it offers. More than $319 billion (£202.8 billion) in transactions move through and more than 730,000 companies use Ariba’s network.

“Cloud-based collaboration is redefining business network innovation, and we are catching this wave in the early stage of its evolution,” said Bill McDermott and Jim Hagemann Snabe, co-CEOs at SAP in a statement. “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.”

Once the deal is completed, it will continue to operate independently with its current management team under the name Ariba, an SAP company. CEO Bob Calderoni is expected to join SAP’s global managing board.

According to Andrew Bartolini, chief research officer at Ardent Partners, the deal could represent a strong opportunity for SAP to boost sales of Ariba products. “While there will be synergies gained in the deal, the biggest opportunity will be the ability to up-sell the complementary Ariba solutions like cloud P2P (e-procurement and e-payables) and network connectivity into the huge SAP customer base,” he wrote on his blog.

In 2010, Ariba sold its sourcing services and outsourcing operations to Accenture for $51 million (£32 million). A month later the company announced the acquisition of e-procurement firm Quadrem for $150 million (£95.3 million).

This latest announcement comes just months after IBM completed the acquisition of e-procurement firm Emptoris.

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