The acquisition will combine Ariba’s buyer-seller collaboration network with SAP’s business process expertise to create new models for business-to-business collaboration in the cloud, the German enterprise software maker said in a statement.
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The Ariba board of directors has unanimously approved the transaction, with the purchase price representing a 20% premium over the 21 May closing price.
The transaction, partly funded by a $3bn loan, is expected to close in the third quarter of calendar year 2012, subject to Ariba stockholder approval, clearances by relevant regulatory authorities, and other customary closing conditions.
Tapping into cloud popularity
The move positions SAP in a fast-growing segment as buyers and sellers across the globe connect in new ways through cloud computing, the company said, expanding growth opportunities and accelerating momentum in the cloud.
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According to some estimates, cloud-based software-as-a-service (SaaS) is expected to grow five times as quickly as sales of programmes installed on business premises.
Analysts said SAP and Ariba complement each other, with Ariba fitting in well with SAP's revamped cloud strategy.
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.
The acquisition is expected to boost SAP’s cloud applications portfolio with the addition of Ariba’s leading cloud-based procurement solutions, while the Ariba network will benefit from the performance-boosting capability of SAP's Hana in-memory platform.
Cloud-based collaboration is redefining business network innovation, and we are catching this wave in the early stage of its evolution
Bill McDermott and Jim Hagemann Snabe, co-CEOs, SAP
“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,” said SAP co-CEOs Bill McDermott and Jim Hagemann Snabe.
“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," they said in a statement.
Driving collaboration and productivity
Bob Calderoni, CEO of Ariba, said networks are playing an increasingly important role in how people connect, share and shop, and businesses are looking for the same connectedness, insight and efficiencies.
"By combining Ariba’s open global trading network and SAP’s solutions and analytics, we are ushering in a new era of business-to-business collaboration and driving new levels of productivity,” he said.
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Upon completion of the transaction, SAP plans to consolidate all cloud-related supplier assets of SAP under Ariba, with the existing management team to 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 the transaction, subject to the approval of the SAP supervisory board.