SAP has signed a definitive merger agreement to acquire Sybase.
Accroding to a statement from SAP announcing the buy "As a result of this transaction, customers will be able to better harness today’s explosion of data and deliver information and insight in real time to business consumers wherever they work so they can make faster, more informed decisions. Companies will benefit from greater productivity, speed and agility to help their businesses grow."
Under the terms and conditions of the merger agreement, SAP's US subsidiary, SAP America, will make an all-cash tender offer for all of the outstanding shares of Sybase common stock at US$65 per share, representing an enterprise value of approximately $5.8 billion.
The per share purchase price represents a 44 percent premium over the three-month average stock price of Sybase. The transaction will be funded from SAP’s cash on hand and a €2.75 billion loan facility arranged and underwritten by Barclays Capital and Deutsche Bank.
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.
According to SAP's media statement, "Both SAP and Sybase will benefit from synergies across product lines and markets. SAP will accelerate the reach of its solutions across mobile platforms and drive forward the realisation of its in-memory computing vision. This will drive higher user adoption of SAP software and unlock significant business value out of existing customer investments. In addition, Sybase’s innovative mobile platform can connect all applications and data (SAP and non-SAP) and enable them on mobile devices. SAP, Sybase and their customers will be able to tap into Sybase’s messaging network to reach 4 billion mobile subscribers through 850-plus operator relationships worldwide and engage their consumers via alerts, transactions and promotions on their mobile devices.
"For Sybase, SAP in-memory technology will provide the opportunity for dramatic performance improvements to its analytic processing capabilities. Sybase 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. Finally, Sybase’s core database business will be enhanced by SAP in-memory technology to deliver integrated transactional and analytical capabilities. At the same time, SAP reinforced its dedication to customer choice by stating that it will continue its commitment to supporting leading database vendors.
"The synergies between the two companies will also expand opportunities for the SAP and Sybase ecosystems. Software and implementation partners can capture new opportunities by innovating on Sybase’s market-leading mobile platform, which will make it easier to create, deliver and securely manage mobile enterprise applications across major device types.
“With this transaction, SAP will dramatically expand its addressable market by making available its market-leading solutions to hundreds of millions of mobile users, combining the world’s best business software with the world’s most powerful mobile infrastructure platform,” said Bill McDermott, co-CEO of SAP and member of the SAP Executive Board. “This is a game-changing transaction for SAP and Sybase customers, who will be better able to connect their employees with key functionality and information from anywhere and make it easier for companies to make faster, more informed business decisions in real time. With SAP’s customer-centric approach, we are resolute in our commitment to support Sybase customers to be best-run businesses.”
SAP said it will continue to support each organisation’s product roadmap while enhancing products to help customers derive additional value from existing investments. It also stated that both companies’ development organisations would remain intact, with the opportunity to cross-collaborate to increase innovation for customers.
Sybase will operate as a standalone unit under the name “Sybase, an SAP Company.” The SAP Executive Board plans to propose to the Supervisory Board to appoint the Chairman and CEO of Sybase to SAP’s Executive Board.