To fortify its position in cloud computing, German software maker SAP has agreed to buy Bellevue, Wash.-based Concur, a provider of software for expense and travel management, for $7.3 billion in cash.
Reuters reports that the acquisition was an inevitability given the momentum in the cloud computing space, even though it was a deal that SAP had tried for a long while to avoid making. However, recently, SAP “came under pressure from cheap rivals that offer services over the internet or ‘the cloud,’” according to Reuters.
With the buy, the newswire notes that SAP is not only beefing up its online products portfolio but will probably leverage Concur’s strength in the travel sector to sell additional software.
According to the deal terms, SAP will offer $129 per share for Concur, which Reuters notes is a “20% premium over the Sept. 17 closing price and just short of the $130.36 record high Concur shares set in January after a two-year upward run.”
SAP will reportedly finance the deal with a loan of up to $9 billion.
Although some analysts do agree that the purchase is expensive, they also contend that because Concur is a leader in its market “the potential synergies will be a valuable addition.”
Concur has about 20,000 customers in more than 150 countries.
The transaction is expected to close before the end of the first quarter of next year.
Source: Reuters: SAP buys expenses software maker Concur for $7.3 billion