By Emma-Victoria Farr and Krystal Hu
LONDON (Reuters) -German software firm SAP is working with investment bank Moelis & Co to sell its corporate learning software business Litmos as it seeks to streamline its operations and focus on cloud-based revenue, three sources told Reuters. The sale of California-based Litmos could fetch a valuation of more than $1 billion, said the sources, who requested anonymity because the matter is private.
Moelis is expected to start an auction process in the coming weeks and will mainly target tech-focused private equity funds in the United States and Europe, two of the sources said. Representatives at SAP and Moelis declined to comment.
SAP bought Litmos as part of its acquisition of U.S. cloud software firm Callidus for $2.4 billion in 2018, rebranding the platform SAP Litmos.
The business provides learning platforms to corporate clients to develop sales and customer service, and is used by more than 30 million people in 150 countries, according to its website.
The sources said Litmos is now seen as a non-core asset, with SAP’s Chief Finance Officer Luka Mucic telling reporters on a recent call that SAP wants to streamline its operations – including divestments – in order to focus on growth drivers.
Moelis helped SAP with a previous disposal in 2020 when the German software giant sold Digital Interconnect (SDI) to Swedish cloud communications firm Sinch for about $250 million.
SAP listed software business Qualtrics in the United States last year, remaining its majority owner.
CEO Christian Klein is reviewing SAP’s portfolio with the intention of moving towards subscription-driven services and increasing cloud-based revenue.
(Reporting by Emma-Victoria Farr and Krystal Hu, additional reporting by Nadine Schimroszik, editing by Pamela Barbaglia and Jason Neely)