SAP, Europe’s biggest technology company, has agreed to buy Qualtrics International for US$8-billion in cash, preempting the US enterprise software company’s plans to go public.
Germany’s SAP, led by CEO Bill McDermott, has secured financing of €7-billion to cover the purchase price and acquisition-related costs, according to a statement on Monday. This is SAP’s largest deal to date, topping its 2014 acquisition of Concur Technologies for $7.2-billion.
“Tuck-ins are tuck-ins but transformative deals are transformative deals,” McDermott said in a conference call. “You’d have to do a whole lot of tuck-ins and spend a whole lot of years tucking-things-in to do what we did here.”
Qualtrics, which makes software for surveying customers and analysing employee sentiment, sees 2018 revenue exceeding $400-million and forecasts a forward growth rate of greater than 40%. The company earlier filed for an IPO of $200-million. It was valued at $2.5-billion in a 2017 private funding round and its customers include Microsoft, JetBlue Airways and General Electric.
SAP anticipates that the transaction will close in the first half of 2019, and Qualtrics will operate as an entity within SAP’s cloud business group. Ryan Smith, Qualtrics’s CEO, will continue to lead the company, which will maintain dual headquarters in Provo, Utah, and Seattle.
“We want to be working with SAP and that’s what were most excited about,” Smith said in the call. — Reported by Joyce Koh and Alex Barinka, (c) 2018 Bloomberg LP
