SAP purchasing Ariba for $4.3B

SAP America has entered into an agreement to acquire Ariba, a cloud-based business commerce network, for an enterprise value of approximately $4.3 billion.

The acquisition will combine Ariba's buyer-seller collaboration network with SAP's customer base to create new models for business-to-business collaboration in the cloud, according to a press release.

The Ariba board of directors has unanimously approved the transaction. The per share purchase price represents a 20 percent premium more than the May 21 closing price and a 19 percent premium more than the one-month volume weighted average price per share. The transaction 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. The transaction is expected to be accretive to SAP's non-IFRS earnings per share in 2013.

The acquisition adds business-to-business collaboration to SAP's existing technologies. SAP in mid-May announced the roadmap for its cloud applications business (Software-as-a-Service), focusing on managing customers, suppliers, employees and financials, in addition to its cloud suite, SAP Business ByDesign and SAP Business One. The acquisition also will boost SAP's cloud applications portfolio with the addition of Ariba's leading cloud-based procurement products.

The companies plan to consolidate all the cloud-related supplier assets of SAP under Ariba. The existing management team will 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 of the transaction and subject to the approval of the SAP supervisory board.