German software giant acquires US sales software provider in order to get head start for front-office software
SAP AG is to acquire US-based Callidus Software Inc, in a deal worth at least $2.4 billion (£1.7bn).
The acquisition will provide the German software giant with a “comprehensive front-office suite”, as California-based Callidus is best known for its cloud-based solutions concerning sales effectiveness, sales performance management and sales execution.
The deal comes as SAP seeks to transition its business away from the traditional software provider model, and more into a cloud provider of software and services.
According to the terms of the deal, CallidusCloud’s ‘Lead to Money suite’ for sales will be combined with SAP’s Customer Engagement suite. This will bolster SAP’s CRM offerings.
The deal has been unanimously approved by the Callidus board of directors, and SAP is paying $36 per share, a 21 percent premium over the 30-day volume. The per share price represents an enterprise value of approximately $2.4 billion.
The transaction is expected to close in the second quarter of 2018, subject to approval from Callidus shareholders, and the usual regulatory blessing.
SAP says the deal will give “ immediate leadership in the Lead to Money space that includes sales performance management (SPM) and configure-price-quote (CPQ).”
“CallidusCloud offers a full suite of SPM and CPQ solutions, including sales enablement, sales analytics and customer engagement,” said the German firm. “The combination of SAP’s assets with CallidusCloud’s will deliver the most complete, end-to-end, fully cloud-based ‘Lead-to-Cash’ offering.”
“SAP is connecting the back office to the front office in this consumer-driven growth revolution,” added Bill McDermott, CEO of SAP. “The addition of CallidusCloud aligns perfectly to SAP’s innovation strategy to transform the front office. SAP gives CallidusCloud the global scale to accelerate its already impressive growth.”
“This move gives customers precisely what they want, the market leading Sales Performance (SPM), Sales Execution (CPQ) and Sales Enablement clouds combined with SAP Hybris and S/4HANA,” said CallidusCloud CEO Leslie Stretch.
“This is true Lead to Money, beyond CRM and beyond Quote-to-Cash. It’s the joined-up Front Office and Back Office Cloud everyone needs for 21st Century Business.”
SAP has been transforming itself over the last couple of years into a cloud software and services provider via its S/4 HANA cloud platform. SAP already has an advantage here, in that many leading businesses and systems already run SAP software, which gives its cloud business a natural route to market.