SAP to float Qualtrics two years after $8bn takeover
GERMAN software giant SAP plans to float its customer survey unit Qualtrics less than two years after it bought it in a blockbuster $8bn (£6.2bn) deal.
The purchase marked the final act by former chief executive Bill McDermott, who touted the deal as a way to accelerate growth by combining SAP’s sales force and a trove of operational data with Qualtrics’ customer experience feedback.
The Walldorf-based company said it now intended to float part of Qualtrics in the US but would remain the majority owner.
An IPO could value Qualtrics, which measures and generates reports on customer and employee satisfaction, at as much as $18.7bn, according to Bloomberg Intelligence analysis.
Ryan Smith, who started Qualtrics with brother Jared in the basement of their parents’ home in Utah, will be the largest individual shareholder and will gain additional autonomy under the market listing.
The surprise about-face signals a strategic shift under Christian Klein, the new chief executive.
“SAP’s acquisition of Qualtrics has been a great success and has outperformed our expectations, with 2019 cloud growth in excess of 40pc, demonstrating very strong performance in the current set-up,” he said.
Mr Klein added that an IPO would provide the “greatest opportunity” for Qualtrics to grow.
“SAP will remain Qualtrics’ largest and most important go-to-market and research and development partner while giving Qualtrics greater independence to broaden its base by partnering and building out the entire experience management ecosystem,” Mr Klein said.
The timing of the IPO will be determined later and is subject to market conditions, SAP said.
The company yesterday raised its outlook for free cash flow in 2020 to €4bn (£3.65bn), which was up from €3.5bn previously.
Operating cash flow will be above €5bn, it said.
Qualtrics’ revenue rose 34pc to €168m in the second quarter from a year earlier.