SAP to Acquire Khimetrics to Further Extend Its Retail Market Leadership

November 22, 2005 by SAP News

SAP for Retail Strengthened with Addition of Price Optimization, Revenue Management and Demand Intelligence Solutions;

New Capabilities also Fortify SAP’s Financial Services and Consumer Products Portfolios

WALLDORF, Germany / SCOTTSDALE, Ariz.,In a move to further extend its leading market position in the retail software space, SAP AG (NYSE: SAP) today announced that it is acquiring privately held Khimetrics, Inc., a leading U.S.-based provider of enterprise software solutions that allow retailers to analyze how to price and position items to boost margins and optimize demand, deliver accurate profitability forecasts and implement long-term sales strategies that promote customer retention.

The acquisition of Khimetrics comes in the wake of SAP’s recent acquisition of Triversity—the leading North American provider of customer-centric, point-of-sale software solutions—demonstrating continuing evidence of SAP’s strategy to acquire narrowly-focused solutions that enhance its offerings and address specific customers’ business challenges. The advanced analytical pricing and forecasting technologies from Khimetrics complement SAP’s recently added in-store solution and will build on SAP’s market-leading retail offering, which extends from the enterprise back office through the retail supply chain and to the store. With more than 2,900 retailers worldwide leveraging SAP software, SAP is the leading provider of enterprise software solutions to the global retail market.

“The addition of Khimetrics’ revenue management and price optimization solutions further extends our retail suite, allowing SAP to offer the most comprehensive and complete retail offering available to customers today,” said Jim Hagemann Snabe, general manager, Industry Solutions, SAP. “Our acquisition strategy is focused and clear and differentiates SAP from its competitors. We’re continuing to strategically add companies that bring valuable functionality to our product suite and extend our leading position within key industry verticals such as retail.”

An innovative segment leader in bringing scientific advances into the retail market, Khimetrics sales increased more than 1,600 percent since 2001, earning the company a spot on Inc. Magazine’s list of 500 fastest-growing private companies in the U.S. for the last two years. In addition to its revenue management and price optimization solutions, Khimetrics is a leader in the emerging market of demand intelligence, advanced analytics software that taps into vast amounts of internal and external customer data to enable retailers to make faster and more educated decisions about forecasts, promotions, pricing, markdowns and assortment to achieve optimal business performance.

Khimetrics’ demand intelligence capabilities can be used across all retail verticals including fast moving consumer goods (hardlines) and general merchandise and apparel (softlines). In addition, the user interface of their demand intelligence solutions has been recognized for its intuitive, logical workflow that follows the mind-set of how a retailer works on a day-to-day basis.

Recognizing the growing market opportunity of providing standard software to retailers, SAP has been making strategic investments in key retail functionalities to enhance its retail offering. The imperative to respond to constantly-evolving customer requirements more efficiently is driving retailers away from investment in expensive, in-house development towards standardized software. Flexible, integrated demand intelligence, such as SAP is adding with Khimetrics, will be a key element of an end-to-end retail offering that supports an efficient response to customer demand.

Based on industry standards, Khimetrics’ Java-based solutions will be quickly and smoothly integrated into the SAP for Retail solution portfolio, which is built on the SAP NetWeaver® platform. The platform allows retailers to leverage existing IT investments inside an integrated solution landscape and helps reduce the complexity of IT while driving innovation, reducing costs and enabling flexible business strategies. As a result, retailers are able to run their entire business on a single platform rather than on a costly mix of best-of-breed scenarios.

Retail is one of three prominent industries being addressed with this acquisition. SAP also will leverage Khimetrics’ assets across other SAP solution portfolios including financial services and consumer products, both industries currently supported by Khimetrics’ solutions. Consumer packaged goods companies use customer demand management solutions to analyze the use of promotion dollars to maximize brand and category performance. Financial service companies use them to find the optimal set of prices and rates for a portfolio of financial products that will maximize profits and hit volume targets.

“The entire Khimetrics team is looking forward to supporting our existing customers with a greater combined strength in application and integration technology experience and bringing Khimetrics products to even more global customers with SAP’s go-to-market capabilities, global reach and scope,” said Brent Lippman, president and CEO of Khimetrics. “As a company with a strong history in advanced product development, we will be an excellent fit with SAP’s culture and outstanding commitment to future-looking research and development.”

The acquisition is expected to be completed in January 2006 and is subject to the approval of the respective anti-trust authorities. Financial terms of the transaction were not disclosed. Currently, SAP intends to maintain the Khimetrics’ Scottsdale, Arizona location and current staff of 130 employees.

About Khimetrics
Khimetrics, Inc., based in Scottsdale, Ariz., is a leading provider of customer demand management solutions for retail, financial services and consumer products goods (CPG) industries. As the customer demand experts, Khimetrics helps retailers synchronize their merchandising strategies with customer demand to increase sales and profit margins while improving competitive positioning. The Khimetrics solutions combine patented products with proven methodologies and expert services to understand, generate and forecast demand. Customers consistently achieve a significant return on investment in less than 12 months.

Khimetrics top-tier customers include Albertsons, PETsMART, Lowe’s, 7-Eleven, Sterling Jewelers, ShopKo Stores, Pamida and Big Y Foods. For more information call 480-308-2500 or visit www.Khimetrics.com.

About SAP for Retail
SAP for Retail is a solution portfolio that combines mySAP™ Business Suite solutions with a broad set of integrated retail applications to help companies profitably serve consumer demand across multiple channels. Today, more than 2,900 retailers worldwide are SAP customers, more than 450 of which are using industry-specific applications from the SAP for Retail solution portfolio. Built on the open architecture of the SAP NetWeaver® platform, SAP for Retail includes core capabilities for financial management, human resources, supplier relationship management and customer relationship management, as well as support for industry-specific merchandise management and planning, store and channel management, demand forecasting, replenishment, sophisticated allocation, workforce management, POS data management and RFID. (Additional information at http://www.sap.com/retail/)

About SAP
SAP is the world’s leading provider of business software solutions*. Today, more than 29,800 customers in over 120 countries run more than 100,600 installations of SAP® software—from distinct solutions addressing the needs of small and midsize enterprises to suite solutions for global organizations. Powered by the SAP NetWeaver® platform to drive innovation and enable business change, mySAP™ Business Suite solutions are helping enterprises around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP industry solutions support the unique business processes of more than 25 industry segments, including high tech, retail, public sector and financial services. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol “SAP.” (Additional information at <http://www.sap.com>)

(*) SAP defines business software solutions as comprising enterprise resource planning and related software solutions such as supply chain management, customer relationship management, product life-cycle management and supplier relationship management.

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