SuccessFactors Stock Soars On Heels of $3.4 Billion Deal to Be Sold to SAP

Palm Beach, FL 12/5/11 (StreetBeat)--Shares of SuccessFactors Inc. (NYSE:SFSF) soared more than 50 percent in premarket trading Monday after the company agreed to be sold to German software company SAP AG (NYSE:SAP) for $3.4 billion.

SuccessFactors makes software specializing in human resources tasks. The proposed acquisition is part of SAP's plan to compete with software rival Oracle Corp (Nasdaq:ORCL). It also underscores the growing interest in companies that deliver software over the Internet.

SAP is offering $40 per share for SuccessFactors. That's a 52 percent premium over SuccessFactors' closing stock price of $26.25 on Friday. SuccessFactors' stock rose $13.61, or 52 percent, to $39.86 in premarket trading Monday. U.S.-traded shares of SAP fell 94 cents, or 1.6 percent, to $58.60.

Morgan Keegan analyst Michael Nemeroff downgraded SuccessFactors to "Market Perform" from "Outperform" based on the deal. He said he does not believe that a higher bid will emerge for the company before SAP closes the acquisition in the next few months. Nemeroff also raised his target price to $40 from $33 and called the offer price "fair."

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