Germany’s SAP has agreed to buy U.S. expenses software maker Concur for $7.3 billion in cash, strengthening its position in cloud computing but sending its shares down almost 3 percent on concern over the price.
SAP has been slow to embrace cloud computing, which allows businesses to cut costs by ditching bulky servers for network-based systems, but the Concur deal announced late on Thursday accelerates its growth in the cloud while protecting its position in travel and expenses management.
The German business software company said it would offer $129 per share for Concur, a 20 per cent premium over the September 17 closing price and just short of the $130.36 record high Concur shares set in January after a two-year upward run.
That is equal to the 20 per cent premium SAP paid for its 2012 acquisition of cloud procurement software maker Ariba, and comparable with the 18 per cent and 19 per cent arch-rival Oracle paid for Taleo in 2012 and RightNow in 2011.
SAP, which competes in cloud computing with global rivals including Oracle, IBM and Salesforce, will finance the Concur acquisition through a credit facility agreement of up to 7 billion euro ($9 billion).
The company had seen the cloud phenomenon as threatening its core business model, but it began a series of acquisitions with the $3.4 billion purchase of SuccessFactors in 2011 after Oracle embarked on its own belated cloud-buying spree.
With the acquisition of Concur, SAP will increase its cloud users to 50 million from 38 million.
“We have something big here, guys,” SAP Chief Executive Bill McDermott told analysts and reporters on a conference call.
