SAP Says $5.8 Billion Sybase Acquisition Opens Enterprise Mobility Market

German software giant says combined companies will enable organizations to become better “unwired enterprises,” harness business data and deliver information on the fly through mobile devices.

SAP Inc. said that its subsidiary SAP America Inc. will purchase Sybase Inc., a Dublin, CA-based maker of data management software, analytics and enterprise mobility solutions, for $5.8 billion or $65 per share of common stock.

The German enterprise software maker said that the acquisition will help move its solutions into mobile platforms and, with a wider collection of products to sell, drive more sales from existing customers in addition to unearthing new ones.

SAP officials said that the Sybase deal is important because it will help companies become better “unwired enterprises,” improving their capacity to harness vast amounts of data and deliver information to customers not tethered to offices.

Accordingly, SAP touted the ability of Sybase’s mobile platform to connect SAP and non-SAP applications and data and enable them on mobile devices. It said that customers will be able to tap into Sybase’s messaging network to reach some four billion mobile subscribers through more than 850 operator relationships worldwide to engage consumers with alerts, transactions and promotions on mobile devices.

Central to the acquisition for SAP appears to be the lever it gains to the mobile business market, a burgeoning segment likely controlled by those vendors whole technology hastens companies' ability to make what Bill McDermott, SAP co-chief executive and executive board member, termed “faster, more informed business decisions in real time” from an assortment of mobile devices.

McDermott said that with the Sybase acquisition SAP will “dramatically expand its addressable market by making available its market-leading solutions to hundreds of millions of mobile users, combining the world’s best business solutions with the world’s most powerful mobile infrastructure platform.”

He described the deal as a “game changing transaction for SAP and Sybase customers, who will be better able to connect their employees with key functionality and information from anywhere” to execute better business decisions.

John Chen, Sybase chief executive, in following suit, said that “enterprise mobility,” or on-the-fly access to business applications and data through an array of devices, is key to the deal.

“By combining the market leader in enterprise applications with the market leader in enterprise mobility, companies around the world will be able to run their business from many different devices,” Chen said.

“This will drive a new wave of enterprise productivity,” he said. “The combined SAP/Sybase will be able to provide a software offering that enables companies to transform their businesses in an increasingly data-, consumer- and mobile-centric world.”

The companies said that the deal also benefits their partners by opening up development opportunities on Sybase’s mobile platform.

Deal draws analyst support

Charles King, an analyst with Pund-IT Inc., a Hayward, CA-based researcher, said that Sybase’s mobility platform offers SAP an unusual opportunity.

“Along with a healthy business, satisfied customers and a solid balance sheet, Sybase’s strong presence in global mobile telephony offers intriguing opportunities for SAP to further leverage and extend its business solutions,” King said.

“Given the exploding interest in smart phones, tablets and other handheld computing devices, this qualifies as a classic no-brainer,” he said.

King noted that “the deal also appears extremely attractive for Sybase, especially given the level of support that SAP has publicly pledged.”

SAP said that it will fund the Sybase purchase with cash on hand and a € 2.75 billion loan underwritten by Barclay’s Capital and Deutsche Bank.

Sybase will operate as a standalone unit and its management team will remain intact, SAP officials said. SAP pledged to support Sybase’s product roadmap.

The deal is expected to close by the end of the third quarter 2010. SAP said that it expects the acquisition will yield cost efficiencies and an uptick in revenue and be immediately accretive to SAP’s per share earnings.

SAP said that it will provide go-to-market and details of the integration of the two companies after the transaction closes.

TAGS: software,mobility,SAP,Sybase,Enterprise

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