SAP to acquire Callidus Software, ramps up pace in the cloud race

SAP SE and Callidus Software (doing business as CallidusCloud) have announced that SAP Americahas entered into an agreement to acquire CallidusCloud.

The acquisition gives SAP immediate leadership in the Lead to Money space that includes sales performance management (SPM) and configure-price-quote (CPQ). CallidusCloud offers a full suite of SPM and CPQ solutions, including sales enablement, sales analytics and customer engagement. The combination of SAP’s assets with CallidusCloud’s will deliver the most complete, end-to-end, fully cloud-based “Lead-to-Cash” offering. CallidusCloud has been a partner of SAP for several years, based on a joint selling agreement.

In addition, both companies have said that CallidusCloud is a “synergistic” addition to SAP’s portfolio and significantly strengthens SAP’s position in the customer relationship management (CRM) space. CallidusCloud’s solutions are tailored to the specific needs of sales people on the ground and link sales-related information, such as pricing, incentives, and commissions, to enterprise resource planning (ERP) systems. CallidusCloud look to link front and back offices, align sales, compensation and corporate goals, and ensure real-time data flow between the field and finance department.

According to SAP, CallidusCloud, combined with SAP’s solution portfolio, also will offer companies the tools to enhance sales execution and transform customer engagement. CallidusCloud’s portfolio will strengthen existing SAP sales solutions. The portfolio will be enriched with sales planning and forecasting, territory management, and pipeline management. SAP’s sales content management will benefit from easy access to contracts, collateral, and learning.

“SAP is connecting the back office to the front office in this consumer-driven growth revolution,” said Bill McDermott, CEO of SAP. “Our customers are focused on reinventing sales, service, marketing, and commerce. The addition of CallidusCloud aligns perfectly to SAP’s innovation strategy to transform the front office. SAP gives CallidusCloud the global scale to accelerate its already impressive growth. These two strong companies will be better together, help the world run better and improve people’s lives.”

The CallidusCloud board of directors has unanimously approved the transaction. The per share purchase price of $36.00 represents a 21 per cent premium over the 30-day volume weighted average price per share and a 28 per cent premium over CallidusCloud’s 90-day volume weighted average price per share. The per share price represents an enterprise value of approximately $2.4 billion (A$2.9b). SAP has elected to fund the transaction with existing cash balances and an acquisition term loan. The transaction is expected to close in the second quarter of 2018, subject to approval from CallidusCloud stockholders, clearances by the relevant regulatory authorities, and other customary closing conditions.

Upon completion of the transaction, SAP expects to consolidate all CallidusCloud product assets within SAP Hybris solutions as part of SAP’s Cloud Business Group. The existing management team will continue to lead CallidusCloud. The SAP Cloud Platform is to be used for the technical integration of CallidusCloud solutions.