SAP paid $496m in cash for Minneapolis-based Retek which develops a suite of management applications to support merchandising operations, inventory and supply chain management, and multichannel retailing.
The price represents a 42% premium over Retek’s closing price at the end of last week. Retek’s board has accepted the deal which is expected to close in April pending regulatory approval.
Retek’s product suite and its 200-plus customers worldwide will give SAP’s retail portfolio a significant boost.
Retek competes against vendors like Manugistics Group Inc and JDA Software Group Inc. But it also came up directly against SAP in a few deals last year suggesting that some product integration challenges might lie ahead.
Oracle Corp, which is one of SAP’s main business applications rivals, used to resell Retek’s products in the late 1990s.
The deal follows comments last month from SAP chief executive Henning Kagermann that hinted at continued strategic investments in technology companies to plug some gaps in SAP’s core business management software.
Retek reported revenue of $174.2m last year and employs around 525 people. Major customers include Best Buy and Gap. Shares of Retek jumped over 40% to $8.43 in Nasdaq midday trading yesterday.
