SAP-Backed Qualtrics Accepts $12.5B Takeover From Silver Lake, CPPIC

Data analytics firm Qualtrics will be taken over by investment firms Silver Lake and the Canada Pension Plan Investment Board in a deal valued at $12.5 billion.

SAP is selling its majority stake in data analytics company Qualtrics International to investment firms for a total value of $12.5 billion, marking one of the biggest private equity IT buyouts of 2023. The move comes four years after SAP acquired Qualtrics for $8 billion, then spun it out of SAP two years later to raise $1.5 billion in an IPO, with SAP still retaining a majority stake.

SAP will sell its 423 million shares of Qualtrics in an all-cash deal to a consortium of investment firms led by Silver Lake and the Canada Pension Plan Investment Board for approximately $18.15 per share.

“Since we acquired Qualtrics in 2019 the company has more than tripled its revenue while delivering profitability,” said SAP CEO Christian Klein in a statement Monday. “Silver Lake has both the operational expertise and the track record with software companies to help Qualtrics extend its leadership in the XM category it pioneered.”

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SAP said its stake will be acquired for approximately $7.7 billion with the entire transaction corresponding to a Qualitrics value of $12.5 billion.

The transaction has been approved by the Qualtrics board as well as the SAP executive and supervisory boards. The deal is expected to close in the second half of 2023.

SAP Layoffs

In January, SAP announced it will be laying off up to 3,000 employees, or about 2.5 percent of its global workforce.

SAP CEO Klein said the 3,000 layoffs are part of a “targeted restructuring in select areas” of the company as well as “to focus more on its core business and profitability.”

“While we know these changes are necessary, it is never easy to make decisions that affect our colleagues in this way,” SAP’s CEO said.

The company provided few details about where the layoffs would occur, either geographically or throughout the company. SAP said the savings from the cuts would be modest in 2023 and provide a savings run rate of between $325 million and $380 million in 2024.

SAP To Remain ‘Close’ Qualtrics Partner

In 2019, SAP acquired Qualtrics for $8 billion. It spun out Qualtrics in 2021 with an IPO that boosted the Qualtrics market cap to over $21 billion.

The number of companies and brands using Qualtrics software has risen from 10,000 at the time of SAP’s purchase to over 18,000 today.

Despite the sale of Qualtrics, SAP said it will remain a close partner.

“SAP intends to remain a close go-to-market and technology partner, servicing joint customers and continuing to contribute to Qualtrics’ success,” said Klein.

SAP recently reported total 2022 revenue of $33.56 billion, up 11 percent from $30.26 billion in 2021. Profit for the entire year was $1.86 billion, down 68 percent from $5.84 billion one year earlier.