SAP Buys Ariba for $4.3 Billion

The consolidation fairy has struck again.

SAP said late Tuesday that SAP America will be buying Ariba for about $4.3 billion, paying $45 a share, a 20% premium, for a company that had revenues of $443.9 million last year, up 38.5%.

Ariba also reportedly has $196 million in the bank.

Ariba’s purchase price falls in between two big recent SAP purchases: the $5.8 billion it paid for the Sybase database in 2010 and the $3.4 billion it paid for SuccessFactors and its talent management widgetry late last year. Spending like it was Oracle, SAP paid $6.8 billion for French BI house Business Objects in 2007.

SAP is going to use cash on hand and debt to pay for its new prize. The acquisition should be accretive in 2013.

SAP is positioning Ariba’s global B2B trading network as “collaboration-as-a-service” or “procurement in the cloud.”

SAP’s co-CEOs Bill McDermott and Jim Hagemann said in a statement that “Cloud-based collaboration is redefining business network innovation, and we are catching this wave in the early stage of its evolution.”

SAP figures Ariba’s widgetry will ultimately benefit from its own real-time in-memory Hana platform.

Ariba currently connects 730,000 companies, whose transactions are worth $319 billion. It expects Ariba to hit a million companies this year. It sees opportunities in China, South America and the Mid-East.

Ariba will remain a free-standing subsidiary after the acquisition closes in Q3 with its network open to companies using Oracle and Microsoft software to connect.

But SAP also said that together SAP and Ariba can deliver an end-to-end solution that enables companies to achieve a closed-loop from source-to-pay, regardless of whether they deploy in the cloud, on-premise or through a combination of both.

The California concern, called the second-largest cloud vendor by revenue, has some 2,600 employees. Ariba CEO Bob Calderoni will be joining SAP’s global managing board. He will run all of SAP’s cloud-related supplier assets.

SAP itself is expecting double-digit revenue growth this quarter and this year despite weakness in the mature markets.

Oracle last month picked up SuccessFactors rival Taleo for $1.9 billion.

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