decor decor
"Your network is the people who want to help you, and you want to help them, and that's really powerful."

-Reid Hoffman

SAP to Acquire Concur Technologies for $8.3 Billion

martinwolf Transaction Analysis

Financial Information

  • Enterprise Value: $8.3 Billion
  • EV/LTM Revenue: 12.4x

Transaction Facts

  • German enterprise software giant SAP (NYSE:SAP) announced that it was purchasing Concur Technologies (NSDQ:CNQR), a travel and expense management software company, for $129 per share.
  • Concur, a leader in the travel and expense management software market, enjoys a B2B network with 23,000 customers, 4,200 employees and 25 million active users across 150 countries.
  • With this acquisition, SAP’s business network (already the world’s largest) will now transact $600 billion annually across 25 different industries and tap into the $1.2 trillion annual corporate travel market.
A Necessary Play To Remain Competitive
  • Building a Better Network: Key to SAP’s growth is its ability to strengthen its online business network – especially by growing into new industries and spaces. As such, SAP has paid similar premiums for companies with strong existing networks in the past such as with B2B marketplace Ariba for $4.3 billion and contract employee management software provider Fieldglass for $1.0 billion earlier this year.
  • Networks in the News: This acquisition comes as Chinese B2B network Alibaba completes its own $21.8 billion IPO. While the space is hot, the two scenarios are not the same. Alibaba has an easier path to growth than SAP – anyone can quickly and easily sign up to sell products.
  • Using Acquisitions to Build Capabilities: SAP faces increasing pressure from strong competitors such as Oracle (NYSE:ORCL), especially in the cloud and mobility space. This acquisition will help bolster SAP’s cloud presence – together the companies will have more than 50 million users in the cloud – but SAP lags behind competitors in regards to mobility.
  • Turning to Inorganic Measures to Supplement Growth: SAP trades at 4.2x and has seen revenue growth rates of 2.2 percent and 3.6 percent for the last two years-despite multiple billion dollar acquisitions. It’s turning to Concur, with its growth rates of 31.8 percent and 24.1 percent in the same periods and 10.3x multiple, in another major acquisition aimed at jumpstarting its declining revenue growth trend.

For more information, view the press release by clicking here. martinwolf was not the advisor in this transaction.

previous post Back to Articles next post

31 Jan 2023

Rising Interest Rates Chill Private Equity Pace

After a year of strength on the private equity front, 2022 is now in the rearview mirror and industry professionals anticipate a downgrade in performance for the coming year.   Despite the fluctuations of the past few years, private equity has withstood the challenges relatively well. However, in certain areas such as exit activity and...

18 Jan 2023

IT Industry Titan John McKenna Announces Retirement 

Congratulations to John McKenna, CEO of ConvergeOne, who announced his retirement today after 14 years at the helm. John has been an integral part of the IT industry for more than 30 years, and his leadership, dedication, and hard work have set the gold standard as a titan in our industry.   John’s tenure at...

21 Dec 2022

Happy Holidays – The 2022 martinwolf Annual Letter

View a pdf of this letter here.    Dear Clients, Partners, and Friends, It’s hard to believe we are closing the books on our 25th year in business. Looking back at our extraordinary colleagues past and present, hundreds of clients, and a global network of buyers and friends, I want to start this year’s letter...