- SAP SE (NYSE: SAP) has announced that it is intending to take Qualtrics public through an initial public offering in the US. Qualtrics was acquired by SAP for $8 billion in cash in November 2018.
SAP SE (NYSE: SAP) has announced that it is intending to take Qualtrics public through an initial public offering in the US. Back in November 2018, SAP had acquired Qualtrics for $8 billion in cash.
What does Qualtrics do? Qualtrics is considered the market leader and creator of the Experience Management (XM) category. And SAP intends to remain the majority owner of Qualtrics.
The objective of the IPO is to strengthen Qualtrics’ ability to capture its full market potential within Experience Management. And this will help increase Qualtrics’ autonomy and enable it to expand its footprint both within SAP’s customer base and beyond.
Qualtrics — which is part of SAP’s cloud portfolio — has operated with greater autonomy than other companies SAP had previously acquired. And the founder and current management team of Qualtrics will continue to operate the company.
SAP had agreed to acquire Qualtrics just four days before Qualtrics was to go public in 2018. SAP had recognized the potential of bringing together experience and operational data (X+O) to help organizations take action. Currently, SAP owns 100% of Qualtrics shares.
And SAP will retain majority ownership of Qualtrics and has no intention of spinning off or otherwise divesting its majority ownership interest. Plus Ryan Smith intends to be Qualtrics’ largest individual shareholder.
SAP said it is fully committed to Experience Management and the Qualtrics XM Platform as a key element of its Intelligent Enterprise Strategy. And SAP will remain Qualtrics’ closest and most important co-innovation and go-to-market partner. The final decision on the IPO and its conditions and timing is pending and subject to market conditions.
Since SAP (as majority shareholder) will continue to fully consolidate Qualtrics, the transaction is not expected to have an impact on SAP’s 2020 or longer-term financial targets.
KEY QUOTES:
“SAP’s acquisition of Qualtrics has been a great success and has outperformed our expectations with 2019 cloud growth in excess of 40%, demonstrating very strong performance in the current setup. As Ryan Smith, Zig Serafin and I worked together, we decided that an IPO would provide the greatest opportunity for Qualtrics to grow the experience management category, serve its customers, explore its own acquisition strategy, and continue building the best talent. SAP will remain Qualtrics’ largest and most important go-to-market and research and development (R&D) partner while giving Qualtrics greater independence to broaden its base by partnering and building out the entire experience management ecosystem.”
— SAP CEO Christian Klein
“When we launched the Experience Management category, our goal was always to help as many organizations as possible leverage the XM Platform as a system of action. SAP is an incredible partner with unprecedented global reach, and we couldn’t be more excited about continuing the partnership. This will allow us to continue building out the XM ecosystem across a broad array of partners.”
— Qualtrics founder Ryan Smith
