European business software maker SAP AG has bought Swiss software developer hybris to expand its customer management platform, taking on Salesforce.com and Oracle in the multibillion-dollar cloud services market.
The two companies announced the deal on Wednesday, but did not divulge financial details. Two sources familiar with the matter told Reuters that SAP paid between $1 billion and $1.5 billion for the company.
SAP declined to comment on the price tag.
Companies focused on the cloud, or providing services over the Internet, have become hot properties of late, commanding intense acquisition interest as corporations move increasingly away from costly in-house IT management. This week, IBM announced a takeover of the website hosting service SoftLayer in a deal that could fetch more than $2 billion.
The SAP-hybris transaction is expected to close in the third quarter of this year. Founded in 1997 and based in Zug, Switzerland, hybris is focused on e-commerce technology. It generated around $110 million in revenue in 2012 and has about 500 customers worldwide.
Its majority investor is HGGC, a private equity firm based in Palo Alto, California.
Talks with SAP began about five months ago, a second source familiar with the matter said.
SAP - similar to No. 1 rival Oracle - has been trying to transform itself into a cloud player and reduce its reliance on traditional business software.
Last year, the company acquired networking and online commerce software developer Ariba in a deal valuing the business at $4.3 billion.