SAP is buying business-travel and expense software vendor Concur for about $8.3 billion, in a bid to continue growing out its portfolio of cloud-based applications.
The move comes a couple of weeks after Bloomberg reported that Concur had been shopping itself to potential buyers, including SAP, Oracle and Microsoft. Oracle decided not to make a deal and Microsoft wasn't interested at all, according to the Bloomberg report.
"Today we are announcing the largest acquisition in the history of the SaaS industry," said SAP CEO Bill McDermott in a conference call.
Concur, based in Bellevue, Washington, has 4,200 employees and more than 23,000 customers encompassing some 25 million users, the companies said, announcing the acquisition. The Concur board has unanimously approved the deal, which is expected to close in the fourth quarter of this year or the first quarter of 2015, said Luka Mucic, CFO of SAP.
Concur sales are growing quickly, as revenue rose 28% to $178.4 million for the quarter ended June 30, but the company isn't currently profitable.
From a product standpoint, SAP and Concur already share many joint customers, and Concur has created a connector that ties its software into SAP back-end financial systems.
SAP said that its business network will transact more than $600 billion annually after the deal closes, across more than 25 different industries, with annual corporate travel spending of $1.2 trillion worldwide funneled through the company's software.
"In acquiring Concur, SAP is also making this clear statement: we are expanding the world's largest business network to innovate the future of business within and between companies and people," said McDermott.
SAP sees potential for expansion of Concur among its own users
"We intend to enable every SAP customer to easily connect to Concur through prebuilt integration points," said Mucic. SAP intends to push Concur beyond North America, which is currently the company's strongest market, into Latin America, Europe and Asia-Pacific.
"We expect all of this will rapidly increase the number of participants on the Concur platform," said Mucic.
The reverse might also help SAP, which is used by only 30% of current Concur customers, according to the companies.
Concur is used by a range of companies including including large enterprises such as Deutsche Bank, Kellogg, Chevron, Google, and smaller companies such as GoPro, MakerBot and the New York Yankees.
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com