SAP to acquire Qualtrics for $8 billion

By Bloomberg | 12 Nov 2018 at 06:16hrs
SAP SE, Europe's biggest technology company, has agreed to buy Qualtrics International Inc. for $8 billion in cash, pre-empting the U.S. enterprise software company 's plans to go public.

Germany's SAP, led by Chief Executive Officer Bill McDermott, has secured financing of 7 billion euros ($7.9 billion) to cover the purchase price and acquisition-related costs, according to a statement Monday. This is SAP's largest deal to date, according to data compiled by Bloomberg, topping its 2014 acquisition of Concur Technologies Inc. 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 analyzing employee sentiment, sees 2018 revenue exceeding $400 million and forecasts a forward growth rate of greater than 40 percent. 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 Corp., JetBlue Airways Corp. and General Electric Co.

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.

Qualtrics was advised on the transaction by Qatalyst Partners and Goodwin Procter, LLP. JPMorgan Chase & Co. acted as a financial adviser and Jones Day acted as legal adviser to SAP.



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