SAP and Sybase, Inc. announced Wednesday afternoon that SAP's subsidiary, SAP America, Inc., has signed a definitive merger agreement to acquire Sybase, in a transaction that will bring them together to enable companies to become better-run "unwired enterprises." The transaction is expected to close in July 2010, and, according to the companies, Sybase, based in Dublin, Calif., will be run as a standalone company under the name "Sybase an SAP company."
Under the terms and conditions of the merger agreement, SAP America, Inc., will make an all cash tender offer for all of the outstanding shares of Sybase common stock at $65.00 per share, representing an enterprise value of approximately $5.8 billion.
"This is a strategic moment for SAP, for Sybase, our customers, and the IT industry," said Bill McDermott, co-CEO of SAP and a member of the SAP executive board, in a conference call for analyst and the press. "This acquisition is about accelerating growth for both businesses. This transaction is fully aligned with our strategic objectives to significantly expand our addressable market, opening up new opportunities in mobility, in-memory computing, and analytics."
The Sybase board of directors has unanimously approved the transaction. The closing of the tender offer is conditioned on the tender of a majority of the outstanding shares of Sybase's common stock on a fully diluted basis and clearance by the relevant antitrust authorities.
"We always said that we would use M&D to move ourselves strategically forward and not just buy market share, and this acquisition does exactly that. The acquisition of Sybase falls right in line with our three-pillar strategy," observed Jim Hagemann Snabe, co-CEO of SAP and member of the SAP executive board, during the conference call. "We are already the market leader in on-premise software with SAP Business Suite, we are extending into on-demand software with SAP Business ByDesign and on-demand extensions for large enterprises, and now, with the acquisition of Sybase, we will be number-one in on-device," Snabe said.
For customers, the combination of SAP and Sybase will help companies to better deal with today's "explosion of data," said McDermott. "Companies need to deliver information and insight in real time to business consumers wherever they work so they can make faster and better decisions. This will literally connect the shop floor to the corner office, unlocking substantial business value from existing technology investments. We call this ‘innovation without disruption.' "
According to McDermott, Sybase's core business will benefit from SAP's in-memory computing technology, and SAP will extend its applications and analytics to billions of mobile users. "As a result of this transaction, SAP will be the only company enabled to deliver a full suite of enterprise software and next-generation business intelligence on any device, at any time, harnessing the power of Sybase's industry-leading mobile platform. We see a huge emerging market for the real-time unwired enterprise."
From a geographic standpoint, Sybase, noted McDermott, has a global footprint including the Asia-Pacific region "which is the fastest growing market for mobile enterprise users; in fact, mobile enterprise applications will play a key role in the global economic development of emerging markets like China where mobile phones outnumber fixed line phones."
Moreover, Sybase as a result of the acquisition will also be able to bring its complex event processing and analytics expertise, which was built in the financial sector, to customers in other industries, markets and product areas in which SAP has a complementary, strong presence. Additionally, Sybase's core database business will be enhanced by SAP in-memory technology to deliver integrated transactional and analytical capabilities. In its press release announcing the acquisition, SAP also reinforced its dedication to customer choice by stating that it will continue its commitment to supporting leading database vendors.
"The key to this acquisition for SAP is Sybase's heterogeneous open platform with device independence. It is important for us because it adheres to the open standards of SAP, therefore with this acquisition, we remain database-, platform- and hardware-agnostic," noted Snabe.
"I firmly believe that the principle behind this transaction is growth," added John Chen, CEO of Sybase, Inc. "The SAP in-memory technology in combination with the SAP Business Objects technology as well as the Sybase column-based architecture will revolutionize how transaction and analytics applications are built in the future. Further, by combining the market leaders in enterprise applications with the market leadership in enterprise mobility, companies and our customers around the world will be able to run their business from any device any time. This will drive obviously a new wave of enterprise productivity."
For more information about SAP, go here.
For more about Sybase, go here.