SAP agrees to Concur

Clouds in Oxford: pic Mike MageeSAP, the maker of expensive business software, which no one understands,  has written a cheque for expense management software maker Concur Technologies.

The all-stock deal is valued at $7.3 billion and will help SAP expand its esoteric presence in cloud computing.

SAP said in a statement it would offer $129 per share for the outfit and, while  this is 20 percent more than the September 17 closing price, it is lower than the $130.36 high Concur had at the beginning of the year.

SAP’s offer is rather generous. Concur is valued at $7.3 billion. Including debt, the offer represents an enterprise value of about $8.3 billion. However it will give SAP 12 million more cloud users.

In a statement SAP Chief Executive Bill McDermott said that buying Concur was consistent with SAPs focus on the business network.

Concur has 23,000 clients that include companies, governments and universities, with more than 25 million users of its business expense and travel management software and services.

More than a third of Concur users run SAP software and the southern-Germany based company expects to add Concur customers.

The Concur acquisition gives SAP deeper access to an area of corporate finance where it is not dominant. “SAP now has a business network that is 75 percent bigger than Amazon, eBay and Alibaba combined,” said CEO McDermott.

The company entered the cloud business quite late in 2012 after spending $7.7 billion on buying internet-based computing companies Ariba and SuccessFactors.

It wants to get 3 billion-3.5 billion euros in sales from cloud computing by 2017 out of a total of at least 22 billion. McDermott said that SAP will raise the outlook after completion of the Concur acquisition.