Google will acquire Apigee for $625 million -- about $17.40 per share in cash -- the companies announced Thursday.
Apigee, an application programming interface (API) management tool, enables developers to integrate with outside apps and services. Both companies expect the transaction to close by the end of 2016.
Most applications use APIs to communicate with other applications. AT&T, Bechtel, Burberry, First Data, Live Nation and Walgreens are among those using Apigee's management platform.
Walgreens, for example, uses Apigee to manage the APIs that enable its partners and developers to build apps. One such API in the mobile app Photo Prints allows mobile app developers to integrate the ability for their app users to print photos at any Walgreens store from their phone.
Apigee's Web site is filled with customer case studies from Cars.com, Vodafone and Ticketmaster, among others.
The new business will fall under Google's cloud services.
“We’re excited about adding Apigee to Google,” Diane Greene, SVP of Google’s cloud businesses, wrote in a blog post. “Companies are moving beyond the traditional ways of communicating. like phone calls and visits. and instead are communicating programmatically through APIs."
API management will become more important as companies increasingly find ways to integrate functions into mobile apps.
In 2015, Forrester Research Analyst Michael Yamnitsky estimated that U.S. companies will spend more than $660 million in 2020 to manage APIs, but international sales will take the global market to more than $1 billion.