German software giant SAP has agreed to buy business-to-business (B2B) procurement firm Ariba for US$4.3bn or US$45 per share.
The share price represents a 20pc premium over the 21 May closing price.
The transaction will be funded from SAP’s free cash and a €2.4m term loan facility.
SAP said its move into the inter-enterprise business network space accelerates its momentum in cloud.
Aruba employs 2,600 people and has annual revenues of US$444m. It achieved 38.5pc growth in 2011.
Industry experts estimate the cloud-based enterprise procurement market at US$5bn in size.
Connect, share, shop
"In our personal lives, networks are playing an increasingly important role in how we connect, share, and shop – bringing more insight and efficiency into everything we do," said Bob Calderoni, CEO, Ariba.
“Businesses are looking for the same connectedness, insight, and efficiencies in the processes and collaboration with customers, suppliers, and partners beyond the walls of their companies.
“By combining Ariba’s open global trading network and SAP’s solutions and analytics, we are ushering in a new era of business-to-business collaboration and driving new levels of productivity," Calderoni said.