SAP Acquires SuccessFactors for $3.4 Billon
The largest maker of business-management software has made a big purchase that is increasing competition in the cloud-computing market.
SAP (NYSE:SAP) has agreed to buy software company SuccessFactors for $3.4 billion in cash, paying $40 per share, a 52% premium on the company's closing price on Friday. With SuccessFactors being a leader in the employee performance software business, the deal will extend SAP's reach in the cloud computing market. Cloud computing is a way for companies to rent software over the internet rather than installing it on their own machines.
SAP is promoting the idea as a safe way to outsource data centers and reduce the need for hardware. SuccessFactors has more than 3,500 customers with more than 15 million subscribers in 168 countries. The company is predicted to have $502 million in revenue in 2013.
This announcement comes after rival company Oracle (NASDAQ:ORCL) bought RightNow Technologies for $1.5 billion dollars.
SAP (NYSE:SAP) has potential upside of 3.6% based on a current price of $59.54 and an average consensus analyst price target of $61.67.
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