{"id":13315,"date":"2012-05-23T00:48:45","date_gmt":"2012-05-22T22:48:45","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=13315"},"modified":"2012-05-23T11:11:00","modified_gmt":"2012-05-23T09:11:00","slug":"sap-up-against-oracle-in-bid-for-ariba","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/software\/13315\/sap-up-against-oracle-in-bid-for-ariba\/","title":{"rendered":"SAP up against Oracle in bid for Ariba"},"content":{"rendered":"

Top European software company SAP AG<\/a> plans to buy U.S. software maker Ariba Inc in a deal valuing the company at $4.3 billion in a bid to compete more aggressively against rival Oracle in the fast-growing cloud computing market.<\/p>\n

SAP and Ariba, a darling of the first dotcom boom that has since reinvented itself as a major networking and online commerce software developer, have agreed to the acquisition at $45 a share, a 20 percent premium over Monday’s closing price.<\/p>\n

The purchase of Ariba, based in Sunnyvale, California, would be the latest in a string of acquisitions by German technology company SAP to help fuel its revenue growth.<\/p>\n

Oracle, the world’s No. 2 maker of business management software, and SAP are both trying to catch up with cloud leader Salesforce.com Inc, which was started over a decade ago by former Oracle<\/a> executive Marc Benioff.<\/p>\n

SAP’s deal values Ariba at 6.9 times expected 2013 revenue, according to Roth Capital Partners. Salesforce.com trades around 5.5 times expected revenue.<\/p>\n

SAP said it expected the deal, already approved by Ariba’s board, to close in the third quarter.<\/p>\n

Ariba shares closed up 19.2 percent to $44.87 on Nasdaq on Tuesday, suggesting investors expect the deal to be completed around that price. Ariba shares had been halted prior to the announcement of the deal.<\/p>\n

The deal puts Ariba’s enterprise value at about $4.3 billion. Enterprise value is market capitalization plus debt and other considerations.<\/p>\n

Evercore analyst Kirk Materne said SAP was paying full value for Ariba, but that the company is “obviously a fairly unique asset that would seem to be a good fit with SAP’s revamped cloud strategy.”<\/p>\n

Cross Research analyst Richard Williams said SAP was underpaying for Ariba.<\/p>\n

“We think a counter-bid is likely and have raised our target to $50 from $40,” Williams said.<\/p>\n

Cloud computing refers to providing software, storage, computing power and other services to customers from remote data centers over the Web.<\/p>\n

Demand for cloud-based software is rising rapidly because the approach allows companies to start using new programs faster and at lower cost than traditional products that are installed at a customer’s own data center.<\/p>\n

In February, Oracle increased its bet on cloud computing by agreeing to purchase Taleo Corp, a maker of Web-based software for recruiting employees, for about $1.9 billion.<\/p>\n

SAP said its transaction would be funded from its free cash and a 2.4 billion euro ($3.06 billion) term loan facility.<\/p>\n

The European company also said it would consolidate its cloud-based supplier assets under Ariba, which would continue to operate as an independent business.<\/p>\n","protected":false},"excerpt":{"rendered":"

Top European software company SAP AG plans to buy U.S. software maker Ariba Inc in a deal valuing the company at $4.3 billion in a bid to compete more aggressively against rival Oracle in the fast-growing cloud computing market.<\/p>\n","protected":false},"author":7,"featured_media":13317,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[25,2901,1250,1073],"class_list":["post-13315","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-software","tag-active","tag-ariba-inc","tag-oracle","tag-sap"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/13315","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=13315"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/13315\/revisions"}],"predecessor-version":[{"id":13349,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/13315\/revisions\/13349"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/13317"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=13315"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=13315"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=13315"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}