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SAP Acquires Concur in Groundbreaking New Deal

By on September 18, 2014 in General with 0 Comments

In a deal valued at about $8.3 billion, SAP just announced that it will be acquiring Concur Technologies. The deal represents a 20 percent premium from the closing price on Sept. 17. According to SAP CEO Bill McDermott, the deal also represents the beginning of something “really big.”

Concur CEO Steve Singh has stated that he believes the company’s growing presence in the cloud and mobile were vital to attracting the interest of SAP. He has further stressed that the acquisition of Concur by SAP will not be typical. In particular, Singh stressed that SAP will not disappear following the closing of the acquisition. Ultimately, the partnership will provide Concur with the funding and tools necessary to drive future expansion.

Founded in 1993, Concur has developed a reputation as a quality producer of travel and entertainment expense management software. The acquisition will give Concur access to SAP’s technology, which will prove to be vital for creating new tools. Today, Concur’s tools are used by approximately 23,000 customers around the world. The firm employees 4,200 workers globally. Revenues for the firm run at about $700 million.

Concur’s shares have remained relatively static over the past year, but the firm’s stock has gained more than 175 percent over the course of the past five years. When it was first announced earlier this year that Concur was up for sale, Bloomberg News was quick to point out that SAP could be a potential buyer.

As a result of the acquisition, Concur and SAP together will boast more than 50 million cloud users. Additionally, the partnership will make them the second-largest cloud company in terms of revenue. When the deal closes, it will give SAP more than $600 billion in transactions annually. McDermott has stated that the acquisition is the largest in software-as-a-service history. Certainly, it is one of the largest acquisitions of a technology firm in the Seattle area in recent years. In fact, this deal even surpasses the deal made by Microsoft when it acquired aQuantive for $6 billion in 2007. It has been reported that Concur spoke with Microsoft about a potential deal before finally reaching an agreement with SAP.

SAP is not the only firm to set out on an acquisition path. Over the past several years, Concur has also acquired several technology firms, including ConTgo, TRX, and GDSX. In 2011, Concur also purchased Tripit at a price of $120 million.

As a result of the acquisition of Concur, SAP’s business network will be expanded significantly to reach a corporate travel spectrum of $1.2 trillion. Additionally, SAP will be able to benefit from the open platform developed by Concur that makes it possible to connect various corporate travel entities, including hotels and airlines, in innovative methods. SAP will also be able to transition all of its corporate travel and expense management to the integrated solutions developed by Concur.

Overall, the acquisition will provide both Concur and SAP customers with greater opportunities for more convenient expense management.


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