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May 22, 2012
Transaction Analysis
SAP America, Inc to Acquire Ariba, Inc (Nasdaq: ARBA)


Financial Overview:

 Transaction Value: $4.3B

  • Enterprise Value: $4.1B
  • EV/Revenue: 8.2X
  • EV/EBITDA: 100.4X
  • Transaction Structure: Cash and Debt  

martinwolf Analysis:

  • SAP America, Inc, operating as a subsidiary of SAP AG (DB: SAP), has signed an agreement to acquire Ariba, Inc (Nasdaq: ARBA), a provider of collaborative business commerce solutions, for $45.00/share (USD), which represents a premium of roughly 20% above Monday's close of $37.64/share and ~20% above the volume weighted average price for the past 30 days.
  • Just as Success Factors (NYSE: SFSF) propelled SAP's Human Capital Management (HCM) offering to the cloud, the ARBA acquisition propels SAP's Supplier Relationship Management (SRM) to the cloud.
  • ARBA's supplier network should do well as cloud adoption continues. In fact, ARBA had been actively using M&A (just as SFSF had done) to restructure the focus of its business toward SaaS-based subscription revenues and growth in the international market:
    • Nov 2010 - Sold sourcing services and business process outsourcing services assets to Accenture.
    • Jan 2011 - Acquired Quadrem International Ltd., a provider of SaaS based commerce solutions for $170M.
    • Oct 2011 - Acquired b-process S.A., an invoice processing provider for $47.9M.
  • With the SFSF and now ARBA acquisitions, SAP clearly outlines its move to the cloud. This presents a number of meaningful changes for SAP's VAR and implementation partners:
    • Beyond having different technology and delivery infrastructures, cloud based offerings have significantly different business models for customers.
    • The SFSF and ARBA acquisitions greatly increase the number of offerings from SAP, allowing for the ability to sell more to existing accounts.
    • The increased offerings can also increase deal sizes as larger implementations become possible. To fully leverage this opportunity requires a stronger infrastructure, balance sheet and resource base.
  • martinwolf expects large, cash rich buyers to continue to make SaaS acquisitions as they believe they are the best owners of smaller cloud assets; however, value does not always trickle down to the mid-market players in the space, since sellers that have achieved scale will continue to be coveted in the marketplace.  

 Please go here to read the press release.


martinwolf was not the adviser in this transaction.  


To learn more about this transaction or our firm, contact Tim Mueller

About martinwolf    


Based in Silicon Valley, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 115 transactions in six countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. martinwolf is a member of FINRA and SIPC. For more information, visit


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