SAP buys Sybase for $US5.8B

David Heath
Friday, 14 May 2010 17:13

IT Industry - Deals

Following a March 2009 alliance in the mobile device arena, SAP has agreed to buy Sybase outright.

Financed by cash on hand and a €2.75B loan, the deal is anticipated to close by July this year with current Sybase CEO, Chairman and President John Chen expected to take a seat on SAP's board.  The price of $US65 per share represents a 44% premium on Sybase's average share price over the past three months.

Probably the most desired part of Sybase is it's In-Memory Database (IMDB) which enables highly computationally intensive tasks to be performed at the workstation rather than at the back-end; giving them a major speed boost.

In addition, continued access to the mobile platform technology, without the constraints of the licensing agreement is also important.

"Had Oracle acquired Sybase, they certainly would have directed Sybase away from working with SAP, so strategically this was a good pre-emptive strike," said Jack Gold, president of analyst firm J. Gold Associates, in an interview.

In a conference call with analysts and media, SAP co-CEOs Bill McDermott and Jim Hagemann Snabe said the two companies have complementary cultures that value respect for people, engineering, innovation, and customer success.  In addition, they noted that, while the enterprise apps provider will continue to push advancements and make investments in both product portfolios, SAP will also continue to support its existing database partners, including IBM and Microsoft.

"Some of my sources that know the company well are of the opinion that instead of mobile, the real reason Sybase is growing is because of its analytics-focused products and the mobile messaging business," said Om Malik, founder of GigaOm.com.

All of which will be of major interest to SAP.