SAP to acquire cloud-based procurement offering Ariba for about $4.3 billion

Tom Paine

SAP just announced it will acquire Ariba for approximately $4.3 billion, a 20% premium on yesterday's close.
Although not a complete surprise, Ariba was probably not too high on the various lists of possible SAP targets that float around.

Ariba provides a cloud-based service for B2B business commerce and procurement.

It is based in Sunnyvale, California. Ariba has approximately 2,600 employees, and recorded $444 million in total revenue and 38.5 percent annual growth in 2011. Net income was $33 million, although Ariba posted a slight operating loss.

Ironically, heavy put action was reported on Ariba on Monday.

SAP acquired cloud HRM vendor SuccessFactors in December 2011 for $3.4 billion to strengthen its position in the Cloud. However, although SAP gave SuccessFactors founder Lars Dalgaard responsibility over all of its Cloud offerings, it said in today's statement that "it is planned to consolidate all cloud-related supplier assets of SAP under Ariba" and maintain Ariba as an independent company within SAP.

SAP is already a significant player in the procurement space, as is Oracle. SAP boosted its presence with the acquisition of Crossgate late last year. Perhaps the fastest rising up and comer, Coupa, just raised another $22 million in venture capital.

SAP said in its statement that "the Ariba network will benefit from the performance delivered by using SAP's in-memory platform SAP HANA".


Spend Matters' Jason Busch commented at the end of last month, "We will also be sharing our analysis of SAP's new SRM interface, which bears a surprising resemblance to Ariba's new UI as well".

SAP to Expand Cloud Presence with Acquisition of Ariba (PR Newswire)



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