SAP, the largest business-management software provider, on Saturday announced a $3.4bn (£2.18bn) deal to buy SuccessFactors in a move to extend its reach in the cloud computing market.
The cash deal will see the US web-based software company, which has more than 15m subscribers across 168 countries, sold for $40 per share – a premium of 52 per cent over its Friday closing price of $26.25.
SAP co-chief executive Bill McDermott said that this deal will help SAP achieve its goal of exceeding €20bn (£17.19bn) in sales and reaching a profit margin of 35 per cent in 2015.
“The cloud is a core of SAP’s future growth, and the combination of SuccessFactor’s leadership team and technology with SAP will create a cloud powerhouse,” he added.
“This will establish an advanced end-to-end offering of cloud and on-premise solutions for managing all relevant business processes.”
Cloud computing is the service where data and processes are hosted remotely via the internet as opposed to being located on office premises.
German trading has seen SAP shares gain 17 per cent this year, valuing the company at just under €55bn.
SAP said that JP Morgan had advised it on its acquisition. Morgan Stanley was the adviser to SuccessFactors, a spokesman for SAP also said.