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SAP Buying HR Software Firm

December 06 2011

Business software giant SAP AG announced plans last week to buy human resources software provider SuccessFactors Inc. for $40 a share, giving SuccessFactors a market value of $3.4 billion.

SuccessFactors’ cloud-based software is aimed at helping business conduct employee performance reviews, manage employee goals, establish employee compensation and manage recruiting among other things.

“The combination of SuccessFactors and SAP will in fact create a cloud powerhouse,” SAP Co-CEO Bill McDermott said in a conference call with analysts. “According to Gartner, human capital management products are expected to reach $10 billion by 2015. Talent management alone is expected to reach $4.5 billion, with 75% of the available solutions expected to be cloud-based. In other words, this market is in the early days.”

SuccessFactors has more than 3,500 customers in 168 countries. It had revenue of $205.9 million in 2010.

Lars Dalgaard, CEO of SuccessFactors, will lead the cloud business of SAP in addition to his responsibilities at SuccessFactors. In addition, SuccessFactors will remain an independent company and operate under the name “SuccessFactors, an SAP company.”

Today, SuccessFactors also announced it struck a deal to acquire Jobs2web, an applicant tracking system, for $110 million in cash. Jobs2Web will bring 150 new customers to SuccessFactors.

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