SAP completes $1.5bn WalkMe acquisition, enhancing digital adoption capabilities

SAP SE (NYSE: SAP) announced the successful completion of its acquisition of WalkMe Ltd., a company renowned for its digital adoption platform (DAP) technology. WalkMe Ltd., listed on the Nasdaq Global Select Market (NASDAQ: WKME), has now been integrated into SAP’s operations in a move designed to strengthen its ability to streamline digital transformation processes for clients. The acquisition underscores SAP’s commitment to leveraging cutting-edge AI to improve user workflows across its extensive business software ecosystem.

WalkMe’s innovative technology enhances workflow execution across software platforms, with a strong focus on improving user adoption and providing seamless experiences. The company’s flagship AI-driven platform, WalkMeX, will be integrated with SAP’s existing copilot Joule, introducing context-aware, proactive assistance to workflows. This integration aims to boost productivity across various business applications.

As part of the acquisition terms, WalkMe shareholders will receive US$14.00 per share in cash for each ordinary share issued and outstanding. The acquisition price reflects an equity value of approximately US$1.5 billion, marking a 45% premium over WalkMe’s closing share price as of June 4, 2024, when SAP and WalkMe agreed on binding terms. The acquisition has been reported to the Nasdaq Stock Market, with trading in WalkMe’s shares expected to be suspended at the close of today’s market, ahead of its delisting.

SAP’s expanded Business Transformation Management portfolio

The acquisition of WalkMe bolsters SAP’s Business Transformation Management portfolio, which already includes SAP Signavio and SAP LeanIX. This deal is strategically important for SAP’s vision to provide comprehensive business transformation solutions. SAP’s CEO, Christian Klein, emphasized the role of WalkMe’s technology in accelerating end-user adoption of software solutions. He noted that WalkMe’s platform is instrumental in enhancing productivity by enabling effective software usage within an organisation’s application landscape.

WalkMe’s DAP technology sits on top of a company’s existing application suite, offering automation and tailored support directly in the workflow. This approach helps businesses maintain consistent and efficient use of their software solutions, reducing risk and boosting productivity. Notably, WalkMe will continue to support non-SAP applications, maintaining its position as a versatile tool across different business environments.

WalkMeX copilot integration with SAP

A key focus of the integration will be the WalkMeX copilot, which leverages AI-driven contextual awareness to guide users through workflows. The platform suggests next steps based on the specific application in use, supporting productivity gains across multiple platforms. SAP’s copilot Joule will be enhanced by WalkMeX’s capabilities, providing SAP customers with greater functionality and personalised help, regardless of which software applications they are using.

Deal to support SAP’s digital transformation leadership

The acquisition highlights SAP’s strategy to strengthen its leadership in the digital transformation arena. By incorporating WalkMe’s advanced digital adoption technologies, SAP will offer clients more efficient methods to adopt new software tools and manage ongoing technological changes. This alignment between WalkMe’s capabilities and SAP’s product offerings is expected to deepen SAP’s relationships with businesses undergoing significant digital transformations.

While the deal is not expected to materially impact SAP’s non-IFRS earnings per share for fiscal 2024, it is seen as a long-term investment in the company’s transformation solutions portfolio. The transaction is set to enhance SAP’s ability to serve its clients with innovative tools that help manage and simplify complex IT landscapes.