German software giant SAP announced on Monday that it has agreed to sell its stake in data analytics firm Qualtrics for $7.7 billion as part of the acquisition of Qualtrics by funds affiliated with financial investor Silver Lake. The transaction is valued at $18.15 in cash per share, corresponding to a Qualtrics equity value of approximately $12.5 billion on a fully diluted basis.
SAP had acquired Qualtrics in 2018 for $8 billion, just days before Qualtrics’ planned initial public offering. The move had surprised the market and investors, as SAP’s main focus had traditionally been on enterprise resource planning (ERP) software. Since then, Qualtrics has been operating as a separate unit within SAP, helping the company expand into the field of customer experience management.
The sale of SAP’s stake in Qualtrics comes as part of Silver Lake’s plan to acquire the company in an all-cash deal, which was first announced in November 2020. Silver Lake has teamed up with Qualtrics’ co-founder and current CEO, Ryan Smith, who will become the largest individual shareholder in the company after the deal is completed. Smith had previously led the charge to buy back Qualtrics from SAP in a $1.55 billion deal that was completed last year.
SAP said in a statement that the sale of its stake in Qualtrics will enable it to focus on its core business of software and cloud computing services. The company has been under pressure from activist investors to improve its performance and focus on growth, especially in the cloud business, where it faces stiff competition from rivals such as Salesforce and Oracle.
The sale of SAP’s stake in Qualtrics is expected to be completed by the end of 2021, subject to regulatory approvals. Silver Lake said in a statement that it is committed to supporting Qualtrics’ growth and development, and will work closely with Smith and the company’s management team to achieve its goals. Qualtrics, which provides businesses with tools to gather and analyse data on customer feedback, employee engagement, and market research, has more than 13,000 customers worldwide, including many Fortune 500 companies.
In summary, SAP has agreed to sell its stake in Qualtrics for $7.7 billion as part of the acquisition of Qualtrics by funds affiliated with financial investor Silver Lake. The transaction is valued at $18.15 in cash per share, corresponding to a Qualtrics equity value of approximately $12.5 billion on a fully diluted basis. The sale is expected to be completed by the end of 2021, subject to regulatory approvals.
