The SAP Concur Acquisition: A Comprehensive Overview

The business world was abuzz in 2014 with the significant financial transaction between the enterprise software giant SAP and the innovative travel and expense management company Concur. This acquisition dove deeply into the conferencing and collaboration spaces, reinforcing SAP's position as a leader in enterprise software solutions.

Transaction Overview and Valuation

As negotiations entering their final stages, the SAP Concur acquisition was expected to be valued at around 6.5 billion Euros. This estimate marked a massive investment by SAP, aiming to bolster its portfolio with Concur's expertise in travel and expense management.

Unanimous Board Approval

The Concur board of directors, recognizing the opportunity for growth and strategic alignment, unanimously approved the transaction. This unanimous approval is a testament to the potential synergies and mutual benefits the deal would bring.

Timeline and Conditions

The deal was anticipated to close either in the fourth quarter of 2014 or the first quarter of 2015, pending approvals from Concur's shareholders and clearances from relevant regulatory authorities. Additionally, the transaction fulfillment hinges on the satisfaction of a variety of customary closing conditions, which are standard in such large-scale acquisitions.

Purchase Price and Value Projections

Under the deal terms, Concur's shareholders would receive a per-share price of US$129, reflecting a substantial premium over market valuations. Specifically, this price represents a 20% premium over Concur's closing price on September 17, 2014, and a 21% premium over its one-month volume-weighted average price per share. This premium was a clear reflection of the value SAP placed on Concur's capabilities and future potential.

Enterprise Value

Coupled with the per-share purchase price, the overall enterprise value of Concur was approximately US$8.3 billion. This valuation served as a critical factor in the acquisition negotiations, highlighting the strategic importance of Concur to SAP's long-term goals.

Funding and Credit Facilities

SAP planned to fund the acquisition through a credit facility agreement, which would provide up to €7 billion. This significant financing was necessary not only to cover the purchase price but also to facilitate debt refinancing and manage acquisition-related costs. To ensure the acquisition's financial stability, SAP initiated an external credit rating process with two agencies. The results of this process were eagerly anticipated by the market and would have a significant impact on the transaction's approval process.

Conclusion

The SAP Concur acquisition was more than just a financial deal; it represented a strategic move by SAP to enhance its enterprise software offerings. The ambitious valuation, combined with the meticulous planning and regulatory approval processes, underscored the importance of this transaction to both companies. As the deal progresses and the closing conditions are met, the future of SAP and Concur looks promising, with opportunities for significant innovation and growth in the enterprise software sector.

Keywords: SAP, Concur, Enterprise Software Acquisition