The manager streamlines the portfolio of SAP.
(Photo: via REUTERS)
Dusseldorf The price list of the software provider SAP currently includes thousands of products. The management around spokesman Christian Klein is therefore running a “strategic initiative” to simplify the portfolio – it will be cleaned up. And SAP is now announcing another deal in the field of portfolio maintenance: the Litmos learning platform is going to the financial investor Francisco Partners.
The conclusion is expected for the fourth quarter and is subject to the antitrust authorities, the Dax group announced on Wednesday evening. The parties did not comment on the financial details. According to Handelsblatt information from group circles, the purchase price is several hundred million euros.
SAP had already sold the communication unit Digital Interconnect to Sinch in 2020 and spun off the business with special software for financial service providers into the joint venture Fioneer in 2021. Further deals are conceivable: In July, Klein analysts announced an “increased concentration on our high-growth core products”.
SAP operates two online training platforms that partially overlap in their offerings: Success Factors Learning, part of its human resources software unit, and Litmos, which was added to the portfolio in 2018 as part of its $2.4 billion acquisition of Callidus Cloud.
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Litmos is now to become independent with the existing management team. Francisco Partners will “provide the necessary investment, focus and experience to continue to achieve continued growth,” said Meg Bear, president of Success Factors, in a statement from SAP.
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Francisco Partners is a household name in the technology industry. Earlier this year, the private equity firm bought a division of IBM specializing in health data called Watson Health. In July, the company secured an additional $17 billion from investors.
The logic of the deal is understandable for SAP insiders: The competition for money, staff and attention is fierce within the group. Areas that the management does not consider strategically important have a particularly difficult time – this is primarily business software such as the S/4 Hana program or the Ariba procurement platform.
CEO Klein is therefore having the portfolio analyzed. And despite the sales, acquisitions are also conceivable. Last year, the group paid around 950 million euros for Signavio, whose platform analyzes business processes and is now to become a central part of the product range.
Incidentally, when rumors about the sale of Litmos spread to the public, there was talk of a significantly higher purchase price – the Reuters news agency named one billion euros as the target sum in May. However, the valuations of technology companies have come under pressure in recent months given the uncertain economy and rising interest rates.
More: “Everyone feels the pressure on margins” – where SAP boss Klein sees opportunities for new growth