Moments ago, SAP announced it would acquire Ariba. According to the news, "SAP AG and Ariba announced that SAP's subsidiary, SAP America, Inc., has entered into an agreement to acquire Ariba for $45.00 per share, representing an enterprise value of approximately $4.3B ... The Ariba board has unanimously approved the transaction." SAP is funding the transaction from "free cash and a €2.4B term loan facility." Further, "The transaction is expected to close in Q3 of calendar year 2012, subject to Ariba stockholder approval, clearances by relevant regulatory authorities and other customary closing conditions ... The transaction is expected to be accretive to SAP's non-IFRS EPS in 2013."

With the acquisition announcement, it's clear that SAP is playing for cloud-keeps in the business applications space, even if Ariba represents a source-to-pay provider that ported its CD business to a SaaS model. Coming on the heels and post-merger integration of the SuccessFactors transaction and the internal SAP cloud team realignment, the Ariba news will no doubt be a surprise to many in the field. While we will analyze the solution and product synergies of the announcement throughout the next few days, there is significant overlap in the solution base between the two providers, and still, a number of holes that SAP will have left to fill (e.g., advanced sourcing/optimization).

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Click here for earlier coverage of Opera's acquisition of BIQ: Initial Coverage and Impressions and The Spend Data Mashup Advantage.

Some transactions in the technology and solutions marketplace end up resonating far beyond the size of the deal. Even though we have no doubt (given the growth of BIQ) that the transaction was a solid -- likely more than solid -- exit all around for the owners, their relative revenue size in the broader analytics market is quite small, even though their influence, adoption and use (through channels and resellers) has far exceeded their size. Still, it's Spend Matters view that the Opera acquisition will have market ramifications that typically result from only larger transactions.

For customers, we believe that the impact to current users with be negligible. Unlike other deals (e.g., Ariba/Procuri) where the acquiring company ended up killing off much if not all of the acquired technology and requiring customers to eventually migrate to a new solution, Spend Matters believes that there is absolutely zero risk of such a scenario in the Opera/BIQ case.

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Opera Solutions is announcing its acquisition of BIQ today. You can read more about the companies, transaction and roadmap here.

For those interested in understanding how the spend analysis market has moved past the basics -- and the role that Opera Solutions and BIQ play within it -- we recommend the following Compass paper: Using Spend Visibility to Drive More Than Category Sourcing Strategies and Spend Reporting. In this paper, we observe one of the core strengths of BIQ – the ability for companies to create mash-ups of different spend, supplier and broader procurement and supply chain datasets. On the most basic level, mash-ups are applications and data sets that combine capabilities and content from different sources.

In a mash-up, these disparate capabilities and content come together to provide what often amounts to an entirely different look at data elements, which in the context of each other can help companies make more informed decisions. Consider, for example, the ability to layer both PPM and warranty claims information on top of traditional spend data. An analysis might show the a new Chinese supplier is meeting initial quality expectations as a low cost producer, but that the parts they are shipping to a specific facility tend to fail at a higher rate than normal.

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Later this morning, Opera Solutions will announce that it has acquired spend analytics specialist, BIQ (and BIQ distributor, Lexington Analytics). Many in the procurement space know of BIQ as a pure-play platform for spend analysis with a focus on the ability to rapidly build, leverage, dissemble, and reconstruct spend cubes of all types. This includes creating mash-ups from diverse data sources that extend beyond AP, invoice and p-card data. Opera is a lesser-known commodity from a product standpoint, but many of its personnel, including senior executives, have extensive resumes in purchasing and supply chain analysis.

As background, the eight-year-old company has over 600 employees and more than a quarter of them are PhD statisticians or scientists. According to an interview with the firm's CEO last year, the organization expected revenue in the "$100 million range" for 2011, and for 2012, was striding to hit a goal of "$140 to $150 million." BIQ's revenue is undisclosed, but based on customer footprint Spend Matters estimates BIQ license revenue in the low to mid-seven figure range (not counting significant related services revenue accruing to partners).

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Please click here for the first post in this series.

For the second post in our series looking at M&A in the procurement and supply chain sector, we'll take a bit of a detour from what I planned originally. The past few weeks since I wrote the original installment have not seen any material deals in the sector (at least not announced yet), but they have seen some very observant statements and themes from colleagues I've talked to or observed on the vanguard of examining deals (a business partner of mine included). Another one of these individuals, friend and colleague Paul Martyn of BravoSolution, also had some astute -- and fortunately, not self-serving -- observations to add to the discussion that I'll share later (unfortunately I can't reveal the sources for the other comments).

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Last week, Goldman Sachs came out with a list of companies it sees as possible acquisition candidates. The list was part of a broader report -- covered extensively in the business media -- suggesting that the time is absolutely right for M&A to heat back up again. This, of course, makes perfect sense (and no doubt, analyzing the return of M&A will get all of our minds off of Goldman "Muppetgate"). The WSJ covered the story and the research note, summarizing the environment when it notes that despite low levels of recent M&A activity, "the large piles of cash on corporate balance sheets, improving consumer confidence, low interest rates and slowing growth have created a ripe environment for a surge in deal making," the firm said. Moreover, "corporate cash balances have grown 55% since 2007, and sales growth is decelerating on a year-over-year basis. Plus, debt is cheap and unlikely to get any cheaper."

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Please click here for Part 1 of this series.

Continuing our analysis of CombineNet's new partnerships with Spend Radar (spend analysis) and Upside (contract management), we'll begin with exploring CombineNet's rationale for structuring these agreements using a partnership approach (rather than building or acquiring technology). Spend Matters asked CombineNet, "why partner vs. build (especially in spend analysis given the strategic importance of data acquisition)?" Here's how they responded:

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Earlier in February, CombineNet announced it had partnered with Spend Radar and Upside in spend analysis and contract management. When we initially heard about the news, we were intrigued for a number of reasons. First, by partnering with third-parties in areas where it doesn't compete today (although one could argue data acquisition and line-level classification is fundamental to doing large scale sourcing and optimization right), CombineNet tacitly acknowledged that the advanced sourcing/sourcing optimization market where it competes is not an island, and that it must have closer linkages with other parts of sourcing suites that are more than batch-based hand-offs. This is an assertion we haven't entirely bought into given the fact that much of the CombineNet user base today is already using other vendors (e.g., Ariba, SAP) to cover other aspects of the source-to-pay automation lifecycle.

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Please click here for the first post in this series and here for our initial coverage of the 1stbp acquisition.

With 1stbp, it's clear to analysts and investors that Basware has acquired more than just e-invoicing volume or geographic presence. One of these specific technology gains, which we profiled in an earlier post, brought stronger virtual printer capability that replaced Basware's former Business Transactions Virtual Printer (BTS Virtual Printer) based on Internet Printing Protocol printing, but required longer to implement without all of the same benefits as the 1stbp capability. But aside from this single gain, Basware appears to be taking on more from 1stbp in its overall e-invoicing connectivity and network-based approach than usual for such a small acquisition.

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