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SAP hopes to embiggen its cloud with Ariba slurp

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Software giant SAP is hoping to beef up its cloud with an offer to slurp business commerce company Ariba for $4.3bn.

The acquisition should give SAP a boost as it tries to claw its way into the cloud, currently dominated by arch-rival Oracle and Salesforce.com.

SAP has been chomping businesses left, right and centre as it attempts to up its revenues and become more cloudy, but Ariba could prove a difficult firm to catch. Many of Ariba's customers use Oracle services, so it wouldn't be unheard of for the firm to swoop in with a better offer.

SAP expects to close the deal, providing there's no interference, in the third quarter this year, financing the buyout with cash and a 2.4bn loan.

Ariba's price tag values the company at over nine times its total revenues for the fiscal year 2011 and at $45 a share that's 20 per cent over the 21 May close.

SAP said that once the deal was done, it was planning to consolidate all its cloud-related supplier assets under Ariba. Should the deal go through, the same management team would stay at the company and would operate as a subsidiary of SAP. ®

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