Qualtrics, an experience management software company used by the likes of Coca-Cola, Pfizer and Uber, announced yesterday that it has entered into a definitive agreement to be acquired by investment firm Silver Lake and the Canada Pension Plan (CPP) Investments, in a US$12.5 billion all-cash transaction.
Software giant SAP first acquired Qualtrics in 2019 and took it public in 2021, with an initial public offering (IPO) valuation of nearly $21 billion.
It traded above its IPO valuation in its first year as a public company, but took a hit over the past year like many other tech companies, plummeting to a low of US$5 billion, where it has remained since.
In a letter summarizing 2022, Christian Klein, chief executive officer of SAP, told shareholders the year “was a stark reminder that no one business, government, or society can tackle the greatest challenges of our time alone” and therefore, “a change is needed”.
Accordingly, in January 2023, SAP announced restructuring plans for select areas of the company, including 3,000 job cuts, as well as stating the intent to sell its stake in Qualtrics.
Silver Lake and CPP Investments submitted a proposal on Mar. 3, offering to acquire 100 per cent of the outstanding shares that Silver Lake does not already own, including the entirety of SAP’s majority ownership interest, a transaction that valued Qualtrics at US$12.5 billion.
As part of the transaction, SAP sold all of its 423 million shares at a purchase price of US$18.15 per share, totalling US$7.7 billion.
Following the acquisition, expected to close in the second half of 2023, Qualtrics will go back to being a privately held company. It will continue to be led by CEO Zig Serafin and will remain headquartered in Utah and Washington.
Klein also stated that “SAP intends to remain its close go-to-market and technology partner, servicing joint customers and continuing to contribute to Qualtrics’s success,” adding that the number of companies and brands using Qualtrics software grew from 10,000 to over 18,000 since SAP’s purchase.