Sometimes the rumors are right. After a couple of weeks of speculation sparked by a Bloomberg article, SAP today confirmed there is indeed an agreement to acquire Concur.
The cloud computing and business software company is shelling out $8.3 billion for Concur, based on a value of $129 per share, "a 20 percent premium over the Sept. 17 closing price," according to SAP.
SAP CEO Bill McDermott last week downplayed the company's appetite for another major acquisition, highlighting a focus on organic growth.
Even so, several Wall Street analysts viewed SAP as a solid strategic acquirer of Concur and, as it turns out, so does McDermott.
"The acquisition of Concur is consistent with our relentless focus on the business network," according to a statement today attributed to McDermott. "We are making a bold move to innovate the future of business within and between companies." Concur follows a few other large purchases (through not as large as Concur in terms of dollars spent) by SAP in recent years, including Ariba and Fieldglass.
SAP expects the transaction to close no later than the first quarter of 2015—and as soon as the end of this year—pending Concur shareholder approval and regulatory clearances.
SAP noted that funding for the deal would come "from a credit facility agreement of up to €7 billion to cover the purchase price, target debt refinancing and acquisition-related costs."
Concur CEO Steve Singh in a statement said his company is "excited about leveraging SAP technology, including HANA as we scale globally," referring to SAP's cloud platform. The press release hinted at a few things to come, including better analytical capabilities and "context-aware" mobile applications.
"Together the two companies will have more than 50 million users in the cloud—more than any enterprise cloud company—and will be the second-largest cloud company by measure of revenue," according to SAP.
According to SAP, "only 30 percent of Concur customers currently run SAP." SAP indicted that it "will migrate all its corporate travel and expense management to Concur's integrated solutions," though a timeframe for that transition was not immediately disclosed.
SAP also pointed to further growth for Concur in the government sector, citing Concur's status as a government contractor for the U.S. federal government.
"SAP, with government customers numbering in the tens of thousands, intends to expand this relationship across the globe with other governments and agencies," according to SAP.