Yahoo Finance SAP Set to Acquire Israel-based WalkMe in Deal Worth $1.5B
SAP SE SAP recently announced that it was set to acquire Israel-based WalkMe in an all-cash deal.
The executive and supervisory boards of SAP along with the board of directors of WalkMe had approved the transaction for $14 per share (45% premium to WalkMe’s closing share price on Jun 4), bringing the total equity value to $1.5 billion.
The acquisition subject to customary closing conditions and regulatory clearances is expected to close in the third quarter of 2024. The buyout is unlikely to have any material impact on SAP’s non-IFRS earnings per share.
Headquartered in Tel Aviv, WalkMe specializes in digital adoption platforms innovations. WalkMe aids business organizations to bolster enterprise productivity and lower risk by ensuring responsible and efficient adoption of software and the workflows powered by its platform.
SAP SE Price and Consensus
SAP SE price-consensus-chart | SAP SE Quote
WalkMe’s AI-powered platform helps to identify friction as experienced by users and delivers the personalized guidance and automation needed to eliminate the friction and perform workflows seamlessly across all applications.
It has a strong clientele base which includes names like International Business Machines, Nestle, the U.S. Department of Defense and ThermoFisher Scientific.
This acquisition complement SAP’s Business Transformation Management portfolio especially SAP LeanIX and SAP Signavio offerings and aid clients in accelerating digital transformations of their business.
SAP highlighted that it is “doubling down on the support” provided to end users with the WalkMe buyout. This would help users to adopt and implement new solutions swiftly and maximize their IT investments.
Headquartered in Walldorf, Germany, SAP is one of the largest independent software vendors in the world and the leading provider of enterprise resource planning software.
SAP’s performance is gaining from strengthening cloud business, especially robust demand for the Rise with SAP and Grow with SAP solutions. In the last reported quarter, Current cloud backlog — a key indicator of go-to-market success in cloud business — increased 27% (up 28% at cc) to €14.18 billion.
Momentum in its business technology platform along with the proliferation of generative AI bodes well. It is now focusing more on vital strategic growth areas, especially Business AI and positioning the company for growth. Management reaffirmed its guidance for 2024 cloud revenues along with 2025 long-term targets including cloud and total revenues.
However, continued softness in the Software license and support business segment along with uncertainty prevailing over global macroeconomic conditions continues to remain as concerns for SAP. Rising costs are likely to put pressure on margin performance.
SAP currently carries a Zacks Rank #3 (Hold).
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