Software giant SAP will acquire sales performance application developer Callidus Software Inc. for $2.4 billion and will offer the Callidus application set as part of a new comprehensive suite of cloud front-office applications.
The acquisition of quote-to-cash (also called "lead-to-money") software vendor Callidus (doing business as CallidusCloud) will pitch SAP into tighter competition with cloud CRM rival Salesforce.com.
The announcement came Tuesday as SAP announced its fourth-quarter and 2017 financial results, including 26 percent year-over-year growth in cloud subscription and support revenue for the entire year.
"SAP is connecting the back office to the front office in this consumer-driven growth revolution," said SAP CEO Bill McDermott in a statement.
"Our customers are focused on reinventing sales, service, marketing, and commerce. The addition of CallidusCloud aligns perfectly to SAP's innovation strategy to transform the front office. SAP gives CallidusCloud the global scale to accelerate its already impressive growth. These two strong companies will be better together, help the world run better and improve people’s lives," McDermott said.
CallidusCloud's directors have approved SAP's $36 per-share offer to acquire the company, up from the stock's $32.70 closing price on Monday and a 21 percent premium over the 30-day volume weighted average share price. Subject to regulatory approvals, the companies hope to complete the acquisition this quarter.
SAP and Callidus have had a joint-selling agreement for several years.
SAP said the acquisition would strengthen its existing sales software portfolio and "is a synergistic addition to SAP's portfolio and significantly strengthens SAP's position in the customer relationship management space."
The acquisition gives it "immediate leadership in the lead-to-money space," which includes sales performance management and configure-price-quote applications, the company said. Callidus' applications also include sales enablement, sales analytics and customer engagement capabilities.
The applications also provide sales professionals with links to back-end ERP systems such as SAP's flagship S/4HANA application set.