SAP has announced that it will buy SuccessFactors for US$3.4 billion, or US$40 per share in cash.
With the move, SAP gets a significant footprint in human-resources software as a service. In a statement, SAP said that the deal will accelerate the company's software as a service strategy. SAP has an offering called Business ByDesign, as well as cloud extensions to its existing software.
The SuccessFactors purchase is pricey — SAP paid a 52 per cent premium for the company. SAP said it will fund the purchase with cash and a €1 billion credit line. The deal is expected to close in the first quarter, start earning in 2012 and then add to profits in future years.
For SAP, SuccessFactors brings expertise and a large customer base of 15 million subscription seats and 3500 customers. SuccessFactors gets access to SAP's 176,000 customers.
When the deal is done, SuccessFactors CEO Lars Dalgaard will run SAP's cloud business. SuccessFactors will remain independent.
In the big picture, SAP's purchase of SuccessFactors will likely trigger a run on cloud-related companies. Oracle bought RightNow, and analysts expect the company to buy its way into the cloud over the next 18 months. SAP apparently plans to do the same.
Via ZDNet US