SAP Shells Out $4.3 Billion for Ariba

SAPBusiness software giant SAP (NYSE:SAP) has agreed to acquire Ariba (NASDAQ:ARBA) to further bolster SAP’s move into cloud computing. The deal is for $4.3 billion, or $45 a share, which represents a 20% premium.

Ariba was a darling of the 1990s whose stock eventually hit $1,000. But the dot-com crash nearly wiped out the company. However, during the past few years, Ariba has transformed itself. The company’s software allows companies to collaborate with partners and customers on a global basis.

In all, Ariba generated $444 million in revenues last year and cash flows came to $76 million.

SAP previously has made other big cloud deals, including a $3.4 billion acquisition of SuccessFactors.

Other traditional software companies, such as Oracle (NASDAQ:ORCL), also have spent billions on cloud deals. But many others, like IBM (NYSE:IBM) and Hewlett-Packard (NYSE:HPQ), have been on the sidelines — though they still might eventually rev up their dealmaking to make the transition to the cloud.

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