SAP to acquire Ariba Inc for $4.3 bn
23 May 2012
SAP AG yesterday revealed that it was buying US business and commerce network company Ariba Inc for $4.3 billion, its biggest push in the fast-growing internet-based computing market and keep pace with its arch rival Oracle Corp.
The deal comes five months after SAP acquired US-based web-based software company SuccessFactors for $3.4 billion. (See: SAP to buy Success Factors for $3.4 bn)
Under the deal that has been approved by Ariba's board, SAP will pay $45 a share, a 20-per cent premium to the company's closing price on 21 May. The purchase price values the Ariba at about 10 times its annual sales.
With around 2,600 employees and annual revenues of $444 million, Ariba is the leader in cloud-based collaborative commerce applications and the second-largest cloud vendor by revenue.
The company combines software-as-a-service (SaaS) technology with a Web-based community and a global network of trading partners.
Founded in 1996, Ariba was one of the first web-based trading companies to go public in 1999 with its stock value worth $6 billion on the first day of trading. With the bursting of the dot-com bubble, Ariba's stock fell to just over $1.5 billion in July 2001. Its current market capitilisation is around $3.77 billion.
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