SAP has announced the acquisition of Callidus Software in a deal worth $2.4 billion.
On Tuesday, ahead of SAP's Q4 and full year financial earnings disclosure, the cloud services provider said that its US unit, SAP America, has entered into an agreement to acquire Callidus Software.
The agreement has been secured by SAP offering a purchase price of $36 per share, a 21 percent premium over an average of the last 30 days, a 28 percent premium over a 90-day average, and a 10 percent boost based on Monday close of $32.70.
In total, the buyout is worth approximately $2.4 billion. SAP will fund the transaction through existing cash and an acquisition term loan.
Trading as CallidusCloud, the company provides cloud-based human resource software, sales, Lead to Money (Quote-to-Cash) systems, marketing, and customer experience solutions. The company counts roughly 5,800 businesses as clients.
"The transaction is expected to be essentially neutral to SAP's non-IFRS earnings per share for fiscal 2018 and accretive to SAP's non-IFRS earnings per share for fiscal 2019," SAP said.
SAP and CallidusCloud have been sales partners for several years, and now the cloud services provider wants to boost its portfolio with the "the most complete, end-to-end, fully cloud-based 'Lead-to-Cash' offering" by combining SAP and CallidusCloud solutions.
SAP added that the deal would "significantly strengthen" the firm's position in the customer relationship management (CRM) space.
On completion, SAP will consolidate the CallidusCloud portfolio and integrate it with SAP Hybris solutions as part of SAP's Cloud Business Group.
"We are super excited to join forces with SAP," CallidusCloud CEO Leslie Stretch said. "This move gives customers precisely what they want, the market leading Sales Performance (SPM), Sales Execution (CPQ) and Sales Enablement clouds combined with SAP Hybris and S/4HANA. This is true Lead to Money, beyond CRM and beyond Quote-to-Cash. It's the joined-up Front Office and Back Office Cloud everyone needs for 21st Century Business."
The acquisition is expected to close in Q2 2018, subject to approval by CallidusCloud stockholders and regulators.