SAP To Buy Experience Management Firm Qualtrics For $8 Bln Cash

(RTTNews) - German software giant SAP SE (SAP) announced late Sunday its definitive agreement to acquire experience management software company Qualtrics International Inc. for $8 billion in cash.

Qualtrics expects full-year 2018 revenue to exceed $400 million and projects a forward growth rate of greater than 40 percent, not including potential synergies of being part of SAP.

Utah-based Qualtrics in October had filed for an initial public offering, aiming to raise about $200 million.

Under the deal terms, the purchase price includes unvested employee incentive compensation and cash on the balance sheet at close. SAP has secured financing of 7 billion euros to cover purchase price and acquisition-related costs.

SAP and Qualtrics' Boards of Directors as well as Qualtrics' shareholders have approved the deal, which is expected to close in the first half of 2019 subject to customary closing conditions.

Qualtrics' experience management or XM Platform collects feedback and data across the four vital areas of a business, such as customers, employees, product and brand. Combining Qualtrics' experience data and insights with SAP's operational data will enable customers to better manage supply chains, networks, employees and core processes, the company noted.

Following the closing of the deal, Qualtrics would become a part of SAP's Cloud Business Group, and will maintain its leadership, personnel, branding and culture. Ryan Smith will continue to lead Qualtrics, which will maintain dual headquarters in Provo, Utah, and Seattle, Washington.

For the deal, Qualtrics was advised by Qatalyst Partners and Goodwin Procter, LLP, while J.P. Morgan acted as financial advisor to SAP.

SAP CEO Bill McDermott said, "We continually seek out transformational opportunities - today's announcement is exactly that. Together, SAP and Qualtrics represent a new paradigm, similar to market-making shifts in personal operating systems, smart devices and social networks. ...When you combine our operational data with Qualtrics' experience data, we will accelerate the XM category with an end-to-end solution with immediate global scale."