SAP's $7B Acquisition War Chest

Ironclad predictions about acquisitions in today’s topsy-turvy enterprise technology market are best left to accredited prophets. Just the same, bullish comments by SAP CEO Leo Apotheker on his company’s $7B acquisition war chest have many pundits predicting future SAP buys.

In early June, Bloomberg reported that Leo Apotheker told the French daily Le Figaro that SAP could spend as much as $7B on acquisitions.

Read Barron's article: SAP Says it Could Spend Up To $7 Billion on Acquisitions

Later in June, the German news agency Welt am Sonntag reported that SAP is in preliminary talks about an acquisition in the neighborhood of $2.1B.

Read Barron's article: SAP: In Talks on Large Acquisitions?

Apotheker is quoted in a recent Wall Street Journal blog as being "open to acquisitions." Regarding SAP's future growth, Apotheker lays bare the greatest difference between him and his predecessor Henning Kagerman: "“Henning has an infinite amount of patience,” he says. “I do not.”

Read Wall Street Journal blog post: SAP to Stick to Software, Says CEO

According to a leaked document, SAP plans to double its current revenue over the next five years.

Read Global CIO blog post: SAP Looking At 35% Margins And Doubled Revenue By 2014

Collectively, these juicy tidbits of information are prompting predictions on possible SAP acquisitions by many industry pundits. Moreover, many pundits are speculating on larger buys -- a departure from SAP's established practice of smaller 'tuck-in' acquisitions.

JMP Securities analyst Patrick Walravens singles out Tibco and Software AG as candidates because both of these companies, according to Walravens, bolster SAP Process Integrator, a component of the company’s NetWeaver middleware suite.

Industry blogger Dennis Howlett does a good job at laying out the rationale for SAP to acquire TIBCO and/or Software AG. Howlett also throws enterprise content management vendor OpenText into the mix.

Read ZDNet blog post: What should SAP do with its $5 Billion War Chest?

As is always the case when a tech company makes noise about possible acquisitions, inverse rumors  arise. Namely, that said tech company is itself an acquisition target. In the case of SAP, age-old rumors of a possible acquisition by Microsoft surfaced but were quickly dispelled by Microsoft CEO Steve Ballmer.

Read Reuters article: SAP Aqcuisition a 'Random Rumor," Says Microsoft

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