Business software giant SAP has announced the acquisition of 'experience management' company Qualtrics for $US 8bn in cash.
SAP will acquire all the firm's outstanding shares and says it has secured financing to the tune of EUR 7bn to cover the acquisition and related costs. Both Boards have approved the transaction, as have Qualtrics' shareholders, and the deal is expected to close in the first half of 2019.
Following completion, Qualtrics' leadership including CEO Ryan Smith (pictured) will remain in place and the firm will operate as an entity within SAP's Cloud Business Group. The company is expected to continue to maintain dual headquarters in Provo, UT, and Seattle, WA.
Qualtrics, which announced just three weeks ago that it was looking to raise $200m via an IPO, and aimed to list on the Nasdaq under the symbol XM, after its core Experience Management platform, will now tap into SAP's customer base of more than 413,000 worldwide, and its global salesforce of around 15,000. Smith comments: 'Our mission is to help organizations deliver the experiences that turn their customers into fanatics, employees into ambassadors, products into obsessions and brands into religions. Supported by a global team of over 95,000, SAP will help us scale faster and achieve our mission on a broader stage. This will put the XM Platform everywhere overnight'.
Qualtrics has just under 2,000 employees and expects full-year 2018 revenue above $400m. Before factoring in the benefits of the SAP buy, it anticipated growth of more than 40% year-on-year. The company was founded in 2002 as a DIY survey company, by brothers Ryan and Jared Smith and their father Scott, with one other co-founder, Stuart Orgill. In 2012 it announced it would expand its SaaS products 'beyond market research', fuelled by a $70m investment from venture capital firms Accel Partners and Sequoia Capital.
Reports suggests the Smith family will make about $3.3bn from the sale. Although it's one of the sector's blockbuster deals for this year, the sale is not - quite - SAP's biggest: it paid $8.3bn in 2014 to acquire travel and expense software company Concur.
SAP CEO Bill McDermott said: 'We continually seek out transformational opportunities - today's announcement is exactly that. Together, SAP and Qualtrics represent a new paradigm, similar to market-making shifts in personal operating systems, smart devices and social networks. SAP already touches 77 percent of the world's transactions. When you combine our operational data with Qualtrics' experience data, we will accelerate the XM category with an end-to-end solution with immediate global scale. For Qualtrics, this introduces a dynamic new partner with the belief, passion and scale to bring experience management to millions of customers around the world'.
Web sites: www.sap.com and www.qualtrics.com .
All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.