Business software giant SAP announced today that it will acquire Ariba’s cloud -based business commerce network for approximately $4.3 billion. SAP’s subsidiary, SAP America, Inc., is offering $45 per share for the platform, and plans to close the deal during the third quarter, pending Ariba shareholder approval of the sale. Ariba had 100.2 million shares on the market, as of March 31st, according to an AP report citing FactSet data.
The Ariba board of directors has already unanimously approved the transaction. The per share purchase price represents a 20% premium over the May 21 closing price and a 19% premium over the one month volume weighted average price per share, says SAP.
The deal will be funded from SAP’s free cash and a €2.4 billion term loan facility and is expected to be accretive to SAP’s non-IFRS earnings per share in 2013. SAP says the acquisition will combine Ariba’s successful buyer-seller collaboration network with SAP’s own customer base and solutions in order to create new models for business-to-business collaboration in the cloud.
Sunnyvale-based Ariba has approximately 2,600 employees, $444 million in total revenue, and experienced 38.5 percent annual growth in 2011. Its business network recorded 62 percent organic growth in the same period. With the addition of Ariba, SAP will acquire the leader in cloud-based collaborative business commerce.
The focus of Ariba’s business is in procurement, spend management, and supplier discovery, and is partnered with major ERP suppliers, including SAP, as well as Salesforce, IBM and Oracle.
“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 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.”