Top executives of SAP AG, a German enterprise software maker, on Wednesday May 12, 2010 bought Sybase, a business software developer, for almost $6 billion. The terms of the deal includes SAP paying $65 a share for Sybase through a tender offer, a 56 percent premium to Tuesday’s closing price of $41.57. SAP will also assume debt of Sybase amounting to $400 million. In addition, SAP will fund the deal with cash on hand plus a 2.75 billion Euro loan facility arranged and underwritten by Barclays Capital and Deutsche Bank. The companies said they expect the transaction to close during the third quarter, immediately adding to SAP’s earnings.

SAP AG, based in Walldorf, Germany, is engaged in selling licenses for software solutions and related services. It also offers consultancy, maintenance and training services for their products. The company has more than 95,000 customers in over 120 countries. Their portfolio includes SAP Business Suite Software for international or large corporations and organizations, SAP Business All-in-One, SAP Business ByDesign and the SAP Business One, all of which cater to the needs of small to midsized companies. Included in their portfolio is the SAP BusinessObjects and the SAP NetWeaver. SAP basically helps companies deal with their regular computing jobs like payroll, inventory tracking and sales.

Sybase has been in the business of developing and expanding database technology. They lead the industry in delivering enterprise software to manage, analyze and mobilize information. Together, SAP and Sybase will be focusing on developing new types of processing software that rely on the strengths of Sybase, and that is, transporting data to and from the smartphones of customers. Sybase, which is based in Dublin, California will operate as a stand-alone unit within SAP, under its current management, where Sybase CEO John Chen running the company who in turn will be joining the executive board of SAP. This deal will position SAP to become a significant player in the mobile enterprise software market thus allowing it to move eventually toward database independence from Oracle.

Resources:
New York Times: SAP to buy Sybase, Ally in Software by Ashlee Vance
Reuters: SAP to buy rival Sybase for $5.8 billion ny Jim Finkle
ZDnet: SAP acquires Sybase: Mobility and Database Options by Michael Krigsman
Bloomberg Business Week: SAP’s New CEOs Rush for Turnaroundwith 5.8 Billion Sybase Buy by Serena Saitto and Aaron Ricadela