SAP is buying mobile and database vendor Sybase for roughly $5.8 billion, the company announced Wednesday.
The all-cash offer of $65 per share amounts to a 44% premium over Sybase's three-month average stock price, according to SAP. Sybase's board has voted unanimously in favor of the deal, which requires clearance by antitrust officials, SAP said.
The pending deal would significantly expand the technological portfolio of SAP, which is known most of all for its ERP (enterprise resource planning) applications.
"They're investing in two areas they think will be important for them," namely mobile technology and in-memory databases, both areas where Sybase is strong, said Ray Wang, partner with Altimeter Group.
In-memory processing is a particular interest of SAP co-founder and chairman Hasso Plattner, who has predicted it will reshape the enterprise application arena thanks to the performance improvement it can provide over databases that must read from and write to disks.
In a statement, SAP said its own in-memory technology would boost the capabilities of Sybase's database platform.
Meanwhile, the deal raises questions about SAP's relationships with other mobile technology companies, such as Research in Motion, said 451 Group analyst China Martens via e-mail.
"They made a big deal of when they announced the relationship with Sybase about how it was nonexclusive and how they hold very dear the partnership with RIM," Martens said. SAP formed a strategic partnership with Sybase in March 2009 focused on mobile applications.
Sybase's database is a less common option for running SAP applications in part due to historical compatibility issues with older SAP platforms. In addition, SAP currently sends lucrative business toward rival Oracle, as it resells the latter's database. Those dynamics could change with Sybase's technology coming under SAP's roof.
But SAP will also gain a new doorway into financial services, where Sybase has a strong presence.
Both companies' product road maps will be preserved, as will their development groups, but "the opportunity to cross-collaborate" will be there, SAP said.
Company officials are scheduled to discuss the deal further in a conference call later on Wednesday.
Developing story. More to come.