In June, SAP made a $4.5 billion (€3.9 billion) bid for accounting platform BlackLine, but was rejected. The German software vendor may make a new bid.
This is according to Reuters, based on sources. BlackLine provides cloud software that automates complex accounting processes for finance departments. The tools replace traditional spreadsheets and reduce errors. The company is of interest to SAP because of its existing collaboration. SAP sells BlackLine solutions to its customers, accounting for nearly 30 percent of BlackLine’s annual revenue.
Buying BlackLine is a “logical extension of the long standing partnership,” CFO Dominik Asam and Chief Corporate Development Officer Georg Kniese wrote in a letter to BlackLine management that Reuters saw.
BlackLine’s software is already tightly integrated with SAP systems. Companies use the platform to clean up financial data before migrating to new environments. SAP users are in the process of migrating to the HANA cloud platform. BlackLine could accelerate this process by making the transition easier.
Offer rejected, future uncertain
On June 18, SAP submitted a formal offer of $66 per share for BlackLine, a 31 percent premium over the average share price over the past 60 days. The offer was not public. BlackLine rejected the offer and indicated that it was not interested in a takeover. SAP is working with JPMorgan on the deal and emphasized in the offer letter that it did not need external financing.
The offer came at a special moment for BlackLine. Co-founder Theresa Tucker was preparing to hand over the reins to co-CEO Owen Ryan, who is also chairman. Tucker officially stepped down at the beginning of this month. It is unclear whether SAP will actually make another offer. The company has not yet made a new formal offer.
It is not known whether BlackLine is willing to reopen negotiations. The June rejection suggests the company wants to continue independently. Nevertheless, SAP continues to consider a new attempt, although there is no concrete timeline.
Tip: SAP presents 15 Joule agents for finance, HR, and supply chain