SAP to buy CallidusCloud that clocked $250 mn revenue for $2.4 bn

SAP HANA business customersBusiness software provider SAP will be acquiring small partner company Callidus Software Inc for a total enterprise value of $2.4 billion.

CallidusCloud in 2017 revealed its revenue guidance for 2018.

CallidusCloud is expecting revenue of $249.6 million in 2017 and $303.0 million in 2018. CallidusCloud’s expected SaaS revenue will be $197 million in 2017 and $251 million, 28 percent growth in 2018.

SAP said the per share purchase price of $36 represents 21 percent premium over the 30-day average price per share and 28 percent premium over CallidusCloud’s 90-day average price per share — indicating that the company is not paying a heavy price for the rival Cloud company.

SAP CEO Bill McDermott said: “The addition of CallidusCloud aligns to SAP’s innovation strategy to transform the front office. SAP gives CallidusCloud the global scale to accelerate its already impressive growth.”

CallidusCloud CEO Leslie Stretch will retain his job along with all existing team members to run the business.

SAP will use existing cash balances and an acquisition term loan to fund the transaction. The transaction is expected to close in the second quarter of 2018.

The transaction is expected to be essentially neutral to SAP’s non-IFRS earnings per share for fiscal 2018 and accretive to SAP’s non-IFRS earnings per share for fiscal 2019.

SAP said it will have leadership in the Lead to Money space that includes sales performance management (SPM) and configure-price-quote (CPQ). CallidusCloud offers SPM and CPQ solutions, including sales enablement, sales analytics and customer engagement.

The combination of SAP and CallidusCloud will deliver the most complete cloud-based Lead-to-Cash offering. CallidusCloud has been a partner of SAP for several years, based on a joint selling agreement.

CallidusCloud significantly strengthens SAP’s position in 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 as part of SAP will link front and back offices, align sales, compensation and corporate goals, and ensure real-time data flow between the field and finance department.

CallidusCloud CEO Leslie Stretch said: “This move gives customers Sales Performance (SPM), Sales Execution (CPQ) and Sales Enablement clouds combined with SAP Hybris and S/4HANA.”

SAP will bring CallidusCloud products within SAP Hybris solutions as part of SAP’s Cloud Business Group.

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