SAP SE agreed to buy U.S. based expense management software maker Concur Technologies Inc. in a $7.4 billion deal to help strengthen its cloud computing business. This is valued at $129 per share of Concur stocks, which has a premium of 20 percent over the closing price last September 17. At the time SAP was exploring the acquision of Concur, the closing stock price was relatively lower by 28 percent. Deustche Bank was advisor on the SAP deal.
SAP is a German-based multinational software corporation that makes business-management software to manage operations and customer relations. It is one of the largest software companies in the world and operates a network of 115 subsidiaries and R&D facilities in several countries.
With the acquisition of Concur, SAP will increase its cloud users from 38 million to 50 million. Cloud computing helps businesses save on costs of physical servers and replace it with network based systems. According to research, global spending on the cloud business is seen to rise by 20 percent this year.
Concur Technologies is a developer of software that businesses use to manage their expenses. The company has 23,000 clients with more than 25 million users. Some of their clients are Kellogg Co., Google Inc, Hess Corp, and Deutsche Bank AG.
Per SAP Chief Financial Officer Luka Mucic, revenue from SAP's web-based programs will be outpacing the traditional software licenses by the year 2020. In the industry of information technology, cloud will be the more preferred model. SAP have always paid its acquisitions in line with its previous cloud investments.Since 2010, the company has spent more than $13 billion on acquisitions of companies like The Walldorf, Ariba Inc., SuccessFactors and Fieldglass. Before the Concur deal was made, SAP has had more than 50 acquisitions since 1991.
The acquision of Concur is estimated to be completed by the end of 2014 or possible until the fisrt quarter of 2015.
