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SAP buying Qualtrics for $8 billion in cash
SAP says it has agreed to pay $8 billion cash for survey-software provider Qualtrics International Inc., which was preparing for an initial sale of stock to the public. SAP said Sunday that the deal was approved by boards of both companies and Qualtrics shareholders. The sale is expected to close in the first half of next year.
Prove, Utah-based Qualtrics filed last week for an IPO. Its products help companies get feedback from employees and customers. Qualtrics said in a regulatory filing that it has more than 9,000 customers including more than 75 percent of Fortune 100 companies.
For Germany's SAP, the deal is one of its biggest. In 2014, it paid about $8.3 billion for Concur, which makes software to manage employee travel and expenses.
J.P. Morgan Chase advised SAP on the deal. Qatalyst Partners, Frank Quattrone's firm, advised Qualtrics even though Goldman Sachs and Morgan Stanley were the listed lead banks for the IPO. Goldman and Morgan Stanley did not know about the sale, according to a person familiar with the matter, who asked not to be named because the discussions were private.
In the first half of 2018, Qualtrics recorded revenue growth of 41.7 percent to $184.2 million. By contrast, SurveyMonkey had $121.2 million in revenue during that same period, up 14 percent. After generating a profit in 2017, Qualtrics reported a $3.4 million net loss for the first six months of this year.
Qualtrics was founded in 2002 by brothers Ryan and Jared Smith and their dad, Scott, along with Stuart Orgill, who resigned from the board last year. The company had 1,915 employees as of Sept. 30, and is based in Provo, Utah.