German business software giant SAP SE SAP 3.85%
He said he would return Qualtrics International Inc. to the public markets, in a listing that is expected to value the business at least 50% above what it paid for starting two years ago.
Qualtrics, based in Provo, Utah, in a regulatory document on Monday, set a starting price range between $ 20 and $ 24, which would rate the company on a fully diluted basis between $ 12 billion and US $ 14.4 billion, according to a person familiar with the matter. Prices can change based on investor feedback until the day before a company’s stock starts trading.
SAP CEO Christian Klein said in July that the company would go public on Qualtrics while remaining a majority shareholder. The deal, he said, would allow Qualtrics to pursue better business opportunities outside of SAP.
Qualtrics shares will be traded on Nasdaq under the symbol “XM”. SAP will retain control of Qualtrics after the planned IPO, including all Class B shares of the company that give it extra voting rights.
The listing comes amid a tumultuous period for the German technology company, partly caused by the pandemic. SAP abandoned its double chief executive structure in April, less than six months after adopting the leadership model. He said the move was aimed at streamlining decision-making during the health crisis after the company cut its annual forecast. In October, the Walldorf, Germany-based company again cut its outlook as coronavirus cases began to increase again.
SAP’s acquisition of Qualtrics, which closed in 2019, helped the company improve its competitiveness in the cloud computing market, SAP said. Shares of companies providing cloud services, such as Snowflake Inc.
and ServiceNow Inc.,
chaired by former SAP CEO Bill McDermott, emerged during the pandemic as more companies adopted these services. SAP’s shares fell 12.5% this year.
In its lawsuit, Qualtrics said Silver Lake would buy $ 550 million of its shares, including 15 million shares at $ 21.64 per share and the rest at the IPO price as part of the offering. Silver Lake earlier this year provided funding for Airbnb, which hit the pandemic Inc.
with guarantees that, when exercised, would value the company at $ 18 billion. Airbnb was valued at $ 47 billion on a fully diluted basis at its IPO price when it made its debut in December. The stock price has more than doubled since its debut.
Qualtrics, in the regulatory process, said that sales this year through the end of September had increased to $ 415 million, from $ 309 million in the same period last year. It posted a net loss of $ 258 million in the first nine months, compared to a loss of $ 860.4 million in the same period last year.
Qualtrics said it has more than 12,000 customers and more than 3,300 employees spread across more than 25 countries. The company was founded in 2002 by Ryan Smith, who served as chief executive until the summer and remains the company’s chairman. Zig Serafin, ex-Microsoft Corp.
executive, took over as CEO in July.
The planned IPO helps to limit a year in which technology companies saw their valuations skyrocket to the highest levels since the dot-com bubble in the early 2000s. Airbnb is now valued at about $ 93 billion, much more than that traditional hosting companies like Marriott International Inc.
or Hilton Worldwide Holdings Inc.
Snowflake Inc., a data storage company that debuted on the market in September, is worth more than 180 times the $ 89 million in revenue earned in the 12 months preceding October.
Write to Matt Grossman at [email protected] and Maureen Farrell at [email protected]
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