SAP Acquires WalkMe, A Digital Adoption Platform (DAPs), for $1.5 Billion

SAP SE has announced its definitive agreement to acquire WalkMe Ltd., a leader in digital adoption platforms (DAPs), for approximately $1.5 billion in an all-cash transaction.

A Digital Adoption Platform (DAP) is an automated software tool that is layered on top of an enterprise application. Its primary purpose is to facilitate the onboarding process for new users, guide them on how to use the organization's applications effectively, and provide insights into how users interact with the application Interface.

This acquisition is set to enrich SAP's Business Transformation Management portfolio, which includes SAP Signavio and SAP LeanIX solutions, and is aimed at enhancing the customer experience and driving business transformation.

The offer price of $14.00 per share represents a 45% premium over WalkMe's closing share price on June 4, 2024. WalkMe's technology focuses on automating contextual, in-app support, which is expected to bring significant value to SAP's enterprise customers. The acquisition is approved by the Executive and Supervisory Boards of SAP SE and the board of directors of WalkMe.

WalkMe's initial public offering (IPO) took place in June, 2021, and resulted in a valuation of US$2.56 billion in that year. However, the Israeli company was valued at less than $880 million on Tuesday, meaning the offer of $14 per share represents a 45% premium.

WalkMe's DAP works on top of an organization's application landscape, providing users with advanced guidance and automation features that enable them to execute workflows seamlessly across any number of applications. This results in higher adoption of the underlying application and drives value realization. Importantly, WalkMe will continue to fully support non-SAP applications.

The acquisition marks a significant milestone for both companies, with SAP CEO Christian Klein emphasizing the importance of applications, processes, data, and people in successful business transformation. WalkMe CEO Dan Adika expressed excitement about joining forces with SAP, highlighting the potential for substantial growth opportunities and greater value delivery to customers.

Soon, WalkMe plans to launch the WalkMeX copilot, which will use WalkMe's contextual awareness and AI to suggest the best next steps for any workflow, anywhere. This innovative feature is expected to serve as an overlay to any application, including copilots from different vendors that companies use in their landscapes.

Applications, processes, data and people are the four key elements of a successful business transformation,” said Christian Klein, CEO and member of the Executive Board of SAP SE. “By acquiring WalkMe, we are doubling down on the support we provide our end users, helping them to quickly adopt new solutions and features to get the maximum value out of their IT investments.”

The acquisition is subject to customary closing conditions, including the receipt of WalkMe shareholder approval and necessary regulatory clearances, and is expected to close in the third quarter of 2024. The impact of the transaction on SAP’s non-IFRS earnings per share for fiscal 2024 is expected to be immaterial.
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