Qualtrics will go private after accepting a $12.5 billion buyout offer from Silver Lake Management and Canada Pension Plan Investment Board.
Silver Lake, CPP Investments and their co-investors will acquire all of the outstanding shares Silver Lake does not already own, including the entirety of SAP’s majority ownership interest.
The deal divorces the company from SAP, which had puts its stock in Qualtrics on the market earlier this year. That was just about four years after it acquired the survey and data company for $8 billion. SAP is currently the largest shareholder in Qualtrics, owning 71% of its stock. The relationship of the companies is largely seen as having been instrumental to helping Qualtrics expand around the globe.
If the affiliation of Qualtrics and SAP has been successful, it’s also been unsettled, according to media reports. The German software giant never seemed to know what to do with the “experience management” company, and even passed on the cross-integration of products that usually follows technology mergers.
Just two years after acquiring Qualtrics in 2020, SAP spun off the company through an IPO. As TechCrunch said at the time, “… this isn’t a story you see every day.” SAP seemed to feel that cutting Qualtrics loose would allow it to better engage with both customers and partners outside the erstwhile parent’s sphere of influence.
“The $150 billion German software giant hasn’t exactly taken a bath on the maker of online surveys for corporate customers, but nor has it created much value for shareholders,” observed Reuters.
On January 26, SAP announced its intention to sell its 71% of Qualtrics stock as part of its plans to focus on core businesses. The news of Silver Lake’s offer came just days later, at $18.15 per share.
‘A Successful Collaboration’
During SAP’s fourth-quarter 2022 earnings call, CFO Luka Mucic said the company would continue working with Qualtrics even as it closed out its ownership stake. “We have had a very successful collaboration on the go-to-market and technology front with Qualtrics and we absolutely will continue this,” he said.
The two companies’ history illustrates the pitfalls of a large, older organizations trying to merge with a younger one, said Reuters. “In theory, SAP could have supercharged the groups’ combined revenue by offering its software to Qualtrics’ customers and vice versa,” the news service said. “But the fact that (SAP CEO) Christian Klein is now planning to offload the group while aiming to maintain a corporate partnership implies that SAP never needed to own the smaller company to do this.”
“As the process continues to play out, we’re committed to achieving the best outcome for our company and our shareholders,” Qualtrics said in a statement last week. Interestingly, the proposed buyout wasn’t widely discussed by either customers or Qualtrics staff at the company’s recent X4 summit.