German software giant SAP has agreed to buy WalkMe in an all-cash deal valued at about $1.5 billion.

The acquisition of WalkMe, a digital adoption platform operator that works with organizations on needs like improving productivity and lowering risk, would strengthen SAP's business management portfolio—specifically with AI offerings, the companies said in a joint announcement Wednesday.

"By acquiring WalkMe, we are doubling down on the support we provide our end users, helping them to quickly adopt new solutions and features to get the maximum value out of their IT investments," SAP CEO Christian Klein said in a prepared statement.

Dan Adika, CEO of Israel-based WalkMe, added that the deal would provide the software-as-service company with the resources and customer base necessary to expand its market reach—pointing to "substantial growth opportunities."

Under the terms of the deal, WalkMe will continue to also support non-SAP applications.

The companies expect the transaction to close in the third quarter. The deal is subject to customary closing conditions, including regulatory approval.

The $1.5 billion offer price, which divvies out to about $14 per share, represents a 45% premium to WalkMe's Tuesday closing share price. WalkMe went public in June 2021 at $31 a share.

Shares of WalkMe were up 42% by midmorning Wednesday. SAP's stock was up 0.84%.

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