The European software giant SAP made a nearly $4.5 billion offer to buy the accounting software firm BlackLine back in June, but the company turned it down. Now, SAP is reportedly considering whether to try again.
According to an offer letter and a source familiar with the deal, SAP made a formal, non-public offer of $66 per share for BlackLine on June 18th. That was a 31% premium over the stock’s recent average price. But BlackLine wasn’t interested and rejected the offer. SAP is now weighing its options, though it hasn’t made another formal offer yet.
An acquisition of BlackLine would be a logical move for SAP. The two companies already have a long-standing partnership, with SAP selling BlackLine’s software to its own customers. In fact, that deal accounts for nearly 30% of BlackLine’s annual revenue. In the offer letter, SAP’s executives called the potential acquisition a “logical extension of the long-standing partnership.”
Buying BlackLine would give SAP a major boost in the competitive market for cloud-based financial software, where it’s fighting rivals like Oracle and Workday. BlackLine’s software, which helps companies automate and manage their complex accounting processes, is already tightly integrated with SAP’s own products. This could be particularly helpful for SAP, which has been struggling to move its customers to its newer cloud platform.
The original offer came as BlackLine’s founder and co-CEO was preparing to step down, a time of transition that SAP may have seen as an opportunity. For now, the deal is on hold, but it’s clear SAP sees significant value in bringing BlackLine fully into its fold.
