SAP breaks buying slump 

Contact: Scott Denne

SAP becomes a buyer again, inking its first substantive transaction in three years with the acquisition of customer identity manager Gigya. The company sat out a flurry of M&A activity among its peers last year. Now the extensive role that identity plays in digital marketing has brought it back to the market.

Last year, Salesforce and Oracle gorged on acquisitions as the latter made the largest ever SaaS deal with the $9.5bn purchase of NetSuite and the former did the most sizeable transaction in its history with the $2.8bn reach for Demandware. In contrast, SAP printed seven deals last year, although none larger than $25m, according to 451 Research’s M&A KnowledgeBase. And, per its annual report, the company spent just $112m of its cash on those transactions. Media reports put the price of Gigya above $300m. The target has more than 300 employees and had raised in excess of $100m in venture capital.

Gigya develops software that enables enterprises to collect data that customers declare in online registration forms and social signups and to link that with CRM and other sales, marketing and commerce applications. SAP Hybris, its e-commerce and marketing software business, has expanded its personalized marketing and customer experience capabilities, a project that’s difficult to execute without a single source of customer identity information, such as that built by Gigya, a longtime Hybris partner.

The rationale for this deal resembles the reasons behind Salesforce’s 2016 purchase of Krux. Yet whereas Salesforce was looking to obtain a hub of data for customer acquisition, Gigya’s tools are designed to help marketers manage customer data to expand customer relationships and has capabilities beyond marketing and into security and privacy.

Goldman Sachs advised Gigya on its sale.

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Posted in M&A