SAP, the big German software company, has agreed to buy Business Objects, a leader in the fast-growing market for business intelligence software, for US$6.8 billion.
The move by SAP underlines the appeal of companies whose software is used to cull through the huge stores of data that corporations accumulate on their own and over the Web to search for insights to help them cut costs, spot sales opportunities and outwit rivals.
The specialist makers of business intelligence software have become takeover targets in recent months. The largest previous deal came in May when Oracle agreed to buy Hyperion, a business intelligence software company, for US$3.3 billion.
The deal is a departure from SAP's longtime approach of shunning big acquisitions. But in a conference call on Sunday afternoon, Henning Kagermann, the chief executive of SAP, said that the purchase of Business Objects was an exceptional case.
"It's a fast-growing market -- business intelligence," Kagermann said. "This is an important step forward for us, and it accelerates our growth strategy."
Business Objects, which has dual headquarters in Paris and San Jose, California, had been rumored to be a takeover target for more than a month. Its share price had risen about 15 percent in the last few weeks, as SAP, Oracle and IBM were all said to be interested in buying the company.
The SAP offer of 42 euros (US$59) per share in cash is roughly 20 percent above last week's closing price for Business Objects, which places a value of more than 4.8 billion euros on the company.
In its most recent quarter, Business Objects reported a 23 percent increase in sales, to US$363 million, while profits rose 68 percent to US$66 million.
John Schwarz, chief executive of Business Objects, said in the conference call that 40 percent of his company's customers were also SAP customers.
"We have a tremendous opportunity to align and package solutions together," he said.
SAP is the leading maker of software that businesses use to automate operations ranging from accounting to marketing to manufacturing. These so-called enterprise resource planning systems serve as the software nervous system of large corporations.
SAP, analysts say, needs to add more capabilities to its software to increase sales and prompt customers to buy new versions. The promise that business intelligence software might be able to glean insights from the data flowing through SAP's enterprise planning system could justify the price of the Business Objects purchase, industry analysts say.
The goal of the deal, Kagermann said, was to put "better analytics" into "our end-to-end business process software."
He said he did not anticipate cutting the Business Objects work force as a result of the merger.
The US$18 billion-a-year business intelligence market is increasingly moving into the hands of larger companies. They see business intelligence as an important addition to a full line of software products for companies.
Microsoft has made a big push into business intelligence in the last two years.
Business Objects was the largest of the publicly traded business intelligence companies, which include Cognos and MicroStrategy. There are also a few significant privately held business intelligence software companies, and SAS, headquartered in Cary, North Carolina, is by far the largest.
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