B2B Focus Returns: SAP Acquiring Ariba (SAP, ARBA, ORCL)

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If you recall the term B2B, you are going back a decade and then some as far as internet companies.  Ariba, Inc. (NASDAQ: ARBA) was one of the key business-to-business platform builders.  Now SAP AG is acquiring Ariba as the company moves further to compete against Oracle Corporation (NASDAQ: ORCL) and other enterprise software players.

The companies announced that SAP America has entered into an agreement to acquire Ariba for its cloud-based business commerce network at a price of $45.00 per share.  This generates and enterprise value (equity and debt) of about $4.3 billion.  The Ariba board of directors has already approved the transaction unanimously and the buyout represents a 20% premium over the May 21 closing price.

Today’s acquisition will combine Ariba’s buyer-seller collaboration network with SAP’s customer base and business process expertise “to create new models for business-to-business collaboration in the cloud.”

SAP is worth almost $70 billion in market value and its $58.77 share price for ADRs compares to a 52-week range of $47.39 to $72.52. Ariba shares were up 0.8% at $37.96 before being halted and the 52-week range is $21.90 to $40.45. With Thomson Reuters having a consensus estimate of $0.99 EPS for 2012, SAP is effectively paying 45-times earnings for Ariba.

JON C. OGG