SAP to acquire WalkMe Ltd. for $1.5bn to enhance digital adoption platforms

In a significant move within the tech industry, SAP SE (NYSE: SAP) and WalkMe Ltd. (NASDAQ: WKME) have announced a definitive agreement under which SAP will acquire WalkMe, a leading provider of digital adoption platforms (DAPs), for approximately $1.5 billion. The all-cash transaction is set at $14.00 per share, representing a 45% premium over WalkMe’s closing share price as of June 4, 2024. This acquisition has been approved by the executive and supervisory boards of SAP SE, and the board of directors of WalkMe.

Strengthening Business Transformation with Advanced Digital Adoption

The acquisition is poised to significantly enhance SAP’s Business Transformation Management portfolio, which includes SAP Signavio and SAP LeanIX solutions. This strategic move aims to support customers on their transformation journeys, integrating advanced digital adoption technologies into SAP’s extensive ecosystem.

Christian Klein, CEO and member of the Executive Board of SAP SE, emphasized the strategic importance of the acquisition: “Applications, processes, data, and people are the four key elements of a successful business transformation. 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.”

A Milestone for WalkMe

Dan Adika, CEO of WalkMe, expressed his enthusiasm for the acquisition, noting it as a milestone in WalkMe’s journey: “We are thrilled to join forces with SAP. This acquisition provides us with the resources and customer base necessary to enhance our product offerings and expand our market reach. By leveraging SAP’s extensive ecosystem, we are poised to unlock substantial growth opportunities and deliver even greater value to our customers.”

Enhancing Productivity and Efficiency

WalkMe’s DAPs help organizations boost enterprise productivity and reduce risk by enabling consistent, effective, and efficient use of software and the workflows it enables. The platform works on top of an organization’s application landscape, providing tailored support and automation needed right in the flow of work, across any application. Notably, WalkMe will continue to fully support non-SAP applications.

The upcoming launch of WalkMeX copilot, which utilizes WalkMe’s contextual awareness and AI to suggest the best next steps for any workflow, signifies the future direction of the integration. WalkMeX will serve as an overlay to any application, including copilots from different vendors used in company landscapes. The integration of WalkMe’s adoption capabilities with SAP’s copilot Joule will enhance AI assistant and productivity gains for all SAP customers.

Closing and Future Outlook

The acquisition is subject to customary closing conditions, including approval from WalkMe shareholders and 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.

The acquisition of WalkMe by SAP is a strategic alignment that strengthens SAP’s position as a leader in digital transformation solutions. By integrating WalkMe’s pioneering digital adoption platforms, SAP not only enhances its product offerings but also reinforces its commitment to supporting businesses in navigating technological changes efficiently.