SAP to buy Callidus for $2.4bn in renewed cloud push

SAP acquisition of Callidus will add to SAP's CRM and salesforce automation options

SAP has agreed to buy Dublin, California-based software firm Callidus for $2.4 billion in bid to expand its interests in the cloud market.

Callidus specialises in cloud-based 'quote to cash' software offered in the cloud under the CallidusCloud service.

SAP confirmed that Callidus had "unanimously approved the transaction", revealing the deal as it unveiled its fourth quarter and full-year financial results.

To fund the deal, SAP will use a combination of its cash reserves and an acquisition term-loan. The deal will be completed by the end of the second quarter of 2018.

The deal, it added, would make SAP an "immediate" leader in the niche lead-to-money software sector, which involves sales performance management (SPM) and configure-price-quote (CPQ) solutions.

Over the past few years, Callidus has developed a range of SPM and CPQ solutions, covering sales management, sales analytics and customer engagement.

SAP claimed that the combination of Callidus with SAP would "deliver the most complete, end-to-end, fully cloud-based 'lead-to-cash' offering". Previously, the two companies had been working together on a joint-selling agreement.

Post-acquisition, SAP expects to "seamlessly link front and back offices, align sales, compensation and corporate goals, and ensure real-time data flow between the field and finance department".

SAP CEO Bill McDermott said that the deal will help support companies' sales management activities. "SAP is connecting the back office to the front office in this consumer-driven growth revolution.

"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."

CallidusCloud CEO Leslie Stretch described himself as "super excited" about the deal. He added: "This move gives customers precisely what they want: market-leading sales performance management (SPM), sales execution (CPQ) and sales enablement clouds combined with SAP Hybris and S/4HANA.

"This is true lead-to-money, beyond CRM and beyond quote-to-cash. It's the joined-up front office and back office cloud everyone needs for 21^st century business."

He added: "In addition, the purchase price provides substantial value to our stockholders."