German enterprise software firm SAP over the weekend announced that it will buy US-based web-based software company SuccessFactors for $3.4 billion in cash, in a bid to become a a global leader in the cloud-computing market.
Under the deal, which is expected to close early next year, SAP has offered $40 a share, or $3.4 billion, a 52 per cent premium to SuccessFactors' 3 December closing price.
The proposed acquisition comes six weeks after SAP's arch rival California-based Oracle, agreed to buy RightNow Technologies Inc, a maker of online customer management software, for $1.5 billion.
Oracle is buying the company at 5.5 times of RightNow's next-year's revenue, while SAP will be paying almost eight times of SuccessFactors's 2012 revenue.
SAP has offered a good premium for the company that is expected to generate about $400 million in revenue next year.
SuccessFactors, makes software used to manage employee performance and carry out performance reviews. The San Mateo, California-based company competes with Taleo Corp and Kenexa Corp.