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SAP SE
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SAP 0.65%
The German provider of business software has agreed on Sunday to buy Qualtrics International Inc. for $ 8 billion, removing the start-up market analysis just days before the planned date for the sale of the company. actions to the public.
SAP is counting on this deal to strengthen it in CRM, or CRM, under Salesforce.com. The company plans to use Qualtrics' analytics capabilities, which offer surveys that companies can use to evaluate customer feedback, to help design future products as well as marketing efforts, said the director. General of SAP, Bill McDermott.
At present, Salesforce is two to three times larger than SAP in the CRM market, said Brad Reback, an analyst at Stifel Nicolaus & Co.
The acquisition, which would be SAP's second largest transaction after the $ 8.3 billion transaction to acquire Concur Technologies Inc., an Expenditure Management Services Company in 2014, shows that the company is "ready to make every effort "to catch up with Salesforce, Mr. Reback said.
But given Salesforce's significant lead, he added, "We do not think that will be enough."
Qualtrics has announced plans to sell its shares to the public last month and is expected to do so on Thursday, said CEO Ryan Smith on Sunday. The company expected a valuation "well north of $ 5 billion," said Smith. According to Mr. McDermott, the offer was oversubscribed 13 times.
"That's not where we thought we would," Smith said of the acquisition. But joining SAP increases Qualtrics' offerings and significantly expands its market, he said.
The cash deal, which includes an unearned performance of employees and cash held by Qualtrics, has been approved by both boards of the company and is expected to be finalized in the first half of 2019, SAP said in a statement.
For the first nine months of 2018, Qualtrics generated a turnover of $ 289.57 million, up 40% over the previous year. He realized an operating profit of $ 2.3 million during the same period, almost double his operating profit of the previous year.
The agreement represents a gain for three venture capital companies that had already invested in the company. Accel and Sequoia Capital invested for the first time in Qualtrics, based in Provo, Utah, in 2012, generating $ 35 million each for a valuation of $ 350 million, said a person familiar with the numbers. The two companies hold respectively 16% and 9% of Qualtrics. Insight Venture Partners owns 15% after investing in a subsequent financing round.
Qualtrics realized a valuation of 2.5 billion USD in April 2017, after a fundraising of 180 million USD.
The founders of Qualtrics had previously declined an offer to sell the company worth about $ 500 million, while they chose to take funding from Accel and Sequoia.
The agreement is the latest multi-billion dollar software acquisition. Two weeks ago, International Business Machines Corp. has agreed to buy the software and services company Red Hat Inc. for about $ 33 billion. In June, Microsoft agreed to buy the GitHub Inc. coding collaboration site for $ 7.5 billion. And Salesforce also reached an agreement: In March, it decided to buy MuleSoft Inc. for $ 6.5 billion to help customers leverage data from older computer systems as they migrated to the cloud.
Write to Jay Greene at [email protected] and Rolfe Winkler at [email protected]
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