WALLDORF, Germany, PROVO, Utah, SEATTLE, Washington The purchase of Qualtrics International, which was founded by two brothers, Ryan and Jared Smith in 2002 in their parents basement in Utah, is expected to take SAP SE to a new level.
The acquisition was announced on Sunday.
We continually seek out transformational opportunities, Sundays 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. SAP already touches 77% of the worlds 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, SAP CEO Bill McDermott said Monday.
The combination of Qualtrics and SAP reaffirms experience management as the ground-breaking new frontier for the technology industry. SAP and Qualtrics are seizing this opportunity as like-minded innovators, united in mission, strategy and culture. We share the belief that every human voice holds value, every experience matters and that the best-run businesses can make the world run better. We cant wait to stand beside Ryan and his amazing colleagues for the next chapters in the experience management story. The best for Qualtrics and SAP is yet to come!
Ryan Smith, CEO of Qualtrics, said: Our mission is to help organizations deliver the experiences that turn their customers into fanatics, employees into ambassadors, products into obsessions and brands into religions. 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.
XM focuses on obtaining and tapping the value of outside-in customer, employee, product and brand feedback. Combining Qualtrics experience data and insights with SAPs operational data will enable customers to better manage supply chains, networks, employees and core processes.
Leveraging SAPs more than 413,000 customers and global salesforce of around 15,000, Qualtrics will be able to scale rapidly around the world. SAP has a strong track record of accelerating growth for the innovative companies it acquires, as demlonstrated by the rapid success of SAPs recent acquisitions.
Qualtrics expects full-year 2018 revenue to exceed US$400 million and projects a forward growth rate of greater than 40 percent, not including potential synergies of being part of SAP.
Following the closing of the transaction, Qualtrics is expected to maintain its executives, branding and culture, operating as an entity within SAPs Cloud Business Group. Ryan Smith, SAP says, will continue to run Qualtrics, and the company is expected to continue to maintain dual headquarters in Provo, Utah, and Seattle, Washington. Qualtrics other locations in Dublin, London, Paris, Munich, Krakow, Singapore, Tokyo, Merlbourne, Canberra and Sydney are also unlikely to be affected.
SAP SE offices are located in cities across 130 countries, however they too are unlikely to be impacted as the companies will remain separate. SAP has two office buildings in each of Dublin and Galway, they too will continue as normal.
Qualtrics was advised on the transaction by Qatalyst Partners and Goodwin Procter, LLP. J.P. Morgan acted as financial advisor and Jones Day acted as legal advisor to SAP.
Under the terms of the agreement, SAP will acquire all outstanding shares in Qualtrics for $8 billion in cash, a 75% premium over the anticipated capitalisation the IPO was expected to deliver. SAP says it has secured financing in the amount of 7 billion to cover the purchase price and acquisition costs. The purchase price includes unvested employee incentive compensation and cash on the balance sheet at close.
Subject to customary closing conditions and attainment of regulatory clearances, the acquisition is expected to close in the first half of 2019. The Boards of Directors of SAP and Qualtrics have approved the transaction. Qualtrics shareholders have also approved the transaction.
Qualtrics is a technology platform that organizations use to collect, manage, and act on experience data, also called X-data. The Qualtrics XM Platform is a system of action, used by teams, departments, and organizations to manage four core experiences of business, customer, product, employee and brand, on one platform. The company says more than 9,000 enterprises worldwide, including more than 75% of the Fortune 100 and 99 of the top 100 U.S. business schools, use Qualtrics.