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European SAP consultancy to absorb U.S. firm

Moving ahead with its expansion strategy, SAP SI says it has agreed to acquire Prescient Consulting in a deal worth roughly $11.4 million.

    Moving ahead with its expansion strategy, European consulting firm SAP SI said Wednesday it has agreed to acquire U.S.-based Prescient Consulting in a deal worth roughly $11.4 million.

    With the acquisition of Prescient, another consulting house focused on SAP software implementations, SAP SI is hoping to bring its expertise and services to U.S.-based companies and is reiterating its commitment to expand its business internationally.

    SAP itself, meanwhile, has announced agreements with International Paper and Network Appliance.

    SAP SI, based in Dresden, Germany, said it will fully acquire Prescient in a transaction using a sales-to-price ratio of 90 percent and based on Prescient's sales in 2000. Atlanta-based Prescient reported $12.7 million in sales for 2000, meaning SAP SI will pay about $11.4 million, the companies said. The transaction is slated to close in the first quarter of this year.

    The giant maker of business management software, created SAP SI last spring by combining systems integration and consulting divisions in a venture with Software AG and Siemens. SAP SI offers clients help with strategies, application development and operation of complex systems centered on products, SAP's core Internet-based suite of software.

    SAP competes against companies such as Oracle, PeopleSoft and J.D. Edwards on several lucrative fronts, including CRM (customer relationship management) software, procurement software and supply-chain automation.

    The Prescient deal comes at a sunny time for SAP, which has had its share of challenging quarters. The company, with dual headquarters in Walldorf, Germany, and Newtown Square, Pa., recently posted healthy fourth-quarter earnings, driven mainly by increased sales of its newer business software. SAP develops software that handles a wide range of business activities, including financials, human resources, manufacturing, marketing and sales.

    The company has enjoyed a recent winning streak, landing big-name clients such as Philip Morris and Advanced Micro Devices that have agreed to use applications to automate some of their internal business processes. SAP has also recently won a number of significant online marketplace deals through its tight alliance with Commerce One, a high-flying maker of business-to-business software.

    SAP on Wednesday announced that International Paper will begin using some parts of its core software suite, including the workplace portal, in an effort to streamline its operations and reduce costs. International Paper said that through the use of SAP's workplace portal, it will be able to share billing, supply and other information with its employees, customers and suppliers.

    Also under the agreement, International Paper will use SAP's procurement software, which will allow it to provide customers and suppliers with product and service information, standardized, automated requisitioning and approval, and a Web-based requisition tool for placing orders through an online catalog.

    Separately, SAP on Wednesday formed a partnership with storage hardware maker NetApp. Under the pact, SAP and NetApp will provide joint customers with NetApp's storage products and software focused on functions such as CRM, business intelligence and supply-chain management.

    In the Prescient acquisition, SAP SI said it plans to rename the consulting firm SAP SI America and retain its 75 employees along with its management team. The transaction is subject to customary closing conditions.