SAP-Concur buyout is one of the largest deals in the tech space



Concur acquisition is the largest acquisition in the cloud space

According to Dealogic, SAP’s (SAP) acquisition of Concur Technologies ranks among the top ten largest software deals. SAP acquired Concur Technologies for $8.3 billion. SAP paid $129 per share. It represents a 20% premium over Concur Technologies’ closing price on September 17. It’s a 21% premium over the one month volume weighted average price per share.

According to SAP’s CEO, Bill McDermott, the Concur acquisition is the largest acquisition in the history of the cloud industry.

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Other notable deals were HP’s (HPQ) buyout of Autonomy for $11.7 billion and Oracle’s (ORCL) acquisition of PeopleSoft for $10 billion in 2013. IBM Corp. (IBM), Microsoft (MSFT), and Oracle (ORCL) are other leading software players. They want a place in the cloud space—organically or through acquisitions.

Increase in merger and acquisition activity in the cloud space

The above chart shows that the total number of acquisitions—transactions volume—increased to 1,598 in 2013. It increased to 1,526 in 2011. It increased 4.7 % on a year-over-year (or YoY) basis. The size of acquisitions also increased to $88 billion in 2013—compared to $82 billion in 2011.

Debt used to finance the purchase

SAP resorted to a $9 billion credit facility to finance the Concur acquisition. It also had debt refinancing and acquisition-related costs.

SAP wants to increase its revenue growth

SAP has aggressively invested in cloud-based computing businesses like SuccessFactors, Ariba, and Fieldglass. The execution of SuccessFactors and Ariba was successful. The companies increased total revenues. It remains to be seen if SAP integrates Concur in a similar fashion.

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