SAP to acquire LeanIX to further expand its business transformation portfolio LeanIX has been a strategic partner of both SAP and Signavio (acquired by SAP in Q1''21), operating in the Enterprise Architecture Management (EAM) software segment, giving its 1,000 customers more clarity on their IT landscapes. The transaction is expected to close in Q4''23. SAP has not indicated the revenue contribution of LeanIX, though we note dealroom.com indicates ~EUR48m revenue in 2022 so less than 1% of SAP''s ~EUR31bn Group revenues in 2022. Tuck-in MandA positive, adds to RISE offering with a side of AI With a new CFO, updated mid-term targets and EUR5bn of buybacks following the Qualtrics divestiture earlier this year we believe shareholders want to see this sort of MandA from SAP (small, tuck-in deals complementing the portfolio rather than larger scale deals). LeanIX will add to SAP''s RISE offering, giving customers more clarity on their IT landscape and confidence to begin their cloud transition with SAP. LeanIX recently launched an AI assistant to automate more processes, providing a foundation for future GenAI-driven recommendations for IT landscape transformation. SAP recently commented it has 20,000 customers still to transition to its cloud offering and with the upcoming maintenance cut-off to come end-2027, we continue to expect accelerating momentum from its customers to move to the cloud. SAP remains our top pick in European software We upgraded SAP in March this year (Dear Mr Asam,) and is our top pick in European software. EUR150 / USD167 TPs unch. Reiterate Outperform.