SAP will buy survey software company Qualtrics for US$8 billion in cash with both companies hoping to provide value to businesses by combining experience data and operational data.
The cloud giant has secured financing in the amount of €7 billion to cover purchase price and acquisition-related costs.
According to Axios, it is the largest-ever purchase of a venture capital-backed enterprise software and the third largest sale of an SaaS company.
Following the close of the transaction in the first half of 2019, Qualtrics is expected to maintain its leadership, personnel, branding and culture, operating as an entity within SAP’s Cloud Business Group. CEO and founder Ryan Smith will continue to lead Qualtrics.
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Qualtrics is expected to continue to maintain dual headquarters in Provo, Utah, and Seattle, Washington. Qualtrics is used by more than 600 organisations in Asia Pacific including ANZ Bank, Chobani and Volkswagen.
Beginning life as a software tool principally used by academics to conduct research, last year Qualtrics launched an experience management (XM) platform to unlock the value of customer, employee, product and brand feedback. SAP said combining Qualtrics’ experience data and insights with SAP’s operational data will enable customers to better manage supply chains, networks, employees and core processes.
Bill McDermott, CEO at SAP said, “Together, SAP and Qualtrics represent a new paradigm, similar to market-making shifts in personal operating systems, smart devices and social networks. SAP already touches 77 per cent of the world’s transactions.
“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. For Qualtrics, this introduces a dynamic new partner with the belief, passion and scale to bring experience management to millions of customers around the world.”
Ryan Smith, CEO of Qualtrics, said, “Supported by a global team of over 95,000, SAP will help us scale faster and achieve our mission on a broader stage. This will put the XM Platform everywhere overnight. We could not be more excited to join forces with Bill and the SAP team in this once-in-a-generation opportunity to power the experience economy.”
Qualtrics expects full-year 2018 revenue to exceed US$400 million and projects a forward growth rate of greater than 40 per cent, not including potential synergies of being part of SAP.