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Reuters
By Douglas Busvine
FRANKFURT, Nov 12 (Reuters) – The German company SAP announced on Sunday that it was buying $ 8 billion in cash for the benefit of Qualtrics International Inc., anticipating an IPO by the US firm specialized in measuring sentiment. consumers online.
The signed agreement, the most important of SAP since its acquisition of the company's travel management and expenses Concur in 2014 for $ 8.3 billion, bolsters the expansion of general manager Bill McDermott in the management Customer Relationship Management (CRM), which is primarily about helping companies manage their finances, logistics and human resources.
This, says McDermott, would give SAP an edge over its competitors, which he said were still based on retrospective numbers such as customer churn.
"The old players who wore their technology from the 90s into the 21st century have just demolished themselves," he told reporters during a conference call. "We have done away with the existing participants in the market."
SAP's competitors include Salesforce and Oracle Corp.
For Qualtrics, this agreement marks a dramatic end just days before the 16-year-old firm launched a much smaller initial public offering.
"This week was the week that we rang," said Ryan Smith, General Manager of Qualtrics, who will remain in office. His company will retain its dual headquarters in Provo, Utah and Seattle.
When asked why he chose to team up with SAP, Smith said, "We want to create something legendary."
THE OPERATION MEETS THE EXPERIENCE
SAP sees an opportunity to combine its "operational" data (the company indicates that 77% of global transaction revenue is in one of its systems) with the "experience" data collected by the Qualtrics platform XM.
Smith described SAP's strategy as "inside" and Qualtrics' "outside".
The two leaders met a few months ago and quickly formed friendships. McDermott stated that he had gone for lunch at Smith's home in suits and dress shoes. Both men ended up playing basketball in the yard.
"We got along well," said McDermott, a 57-year-old New Yorker who has been leading SAP since 2010.
The SAP boss had previously stated that he was only interested in "hidden" acquisitions. He described the Qualtrics contract as a transformation in terms of growth potential, comparing it to the takeover by Facebook of Instagram, the photo-sharing site.
Qualtrics expects a turnover of more than $ 400 million this year and anticipates a forecast growth rate of over 40%, not counting the potential synergies that can result from SAP's integration. Smith said the company had always been positive in terms of cash flow.
On the other hand, SAP expects total revenues to increase by 7.5 to 8.5 percent to more than 25 billion euros, although its new cloud-based products are growing at levels comparable to those of Qualtrics.
SAP recently launched a new cloud-based sales and marketing suite, called C / 4HANA, to complement its core S / 4HANA line, which is sold to 9,500 companies.
SAP will acquire all of the outstanding shares of Qualtrics and has secured financing of 7 billion euros ($ 7.9 billion) to cover the purchase price and the costs associated with the acquisition. . The transaction, which has been approved by the boards of directors of both companies, is expected to be finalized in the first half of 2019.
Qtralyst Partners and Goodwin Proctor, LLP advised Qualtrics on the transaction. JP Morgan acted as financial advisor and Jones Day as SAP's legal advisor.
($ 1 = 0.8835 euros)
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