Qualtrics was only days away from an initial public bid when SAP broke out the news in November 2018 that it would buy out the group for $8 billion. Now, it looks like Qualtrics has another chance to go public as SAP disclosed on Sunday its plans to take the subsidiary to the stock market.
SAP, in a press statement issued on Sunday, said that Qualtrics had witnessed Cloud growth "in excess of 40 percent" in a quote attributed to SAP chief executive officer Christian Klein, Danny Crichton wrote in his TechCrunch report.
The company, as per the TC report, will continue to be operated by founder and former chief executive Ryan Smith, who joined SAP with Qualtrics and led the company within the German conglomerate.
The business software group will maintain a majority stake in the business following the U.S. IPO, which in turn will make Qualtrics co-founder Ryan Smith the biggest shareholder, the company revealed late Sunday.
A U.S. listing could give Qualtrics – which measures and generates reports on client and personnel satisfaction – around 16 billion euros in value ($18.7 billion), Bloomberg Intelligence analysis showed, which is over twice what SAP agreed to pay in late 2018 in its largest acquisition ever.
The move to take Qualtrics to the United States stock market would in part unwind former top executive Bill McDermott's last major takeover and rebalance the company back toward its German roots under the leadership of Christian Klein.
According to Klein in a media statement, they have decided that an IPO would give the greatest opportunity for Qualtrics "to grow the experience management category and serve its customers," Matt Weinberger of Business Insider quoted Klein as saying in his statement.
The news comes ahead of SAP's earnings release set for Monday. The group bared its initial financial results earlier this month, posting sales of around €6.74 billion (almost $8 billion), an increase of around 2 percent from the same period last year. Following the report, SAP's stock, which settled at 158.62 at the close on Friday, has been on a slow ascent and has now risen 16 percent from 2019.
The company's revenue was up 35 percent to 168 million euros in the second quarter from a year ago, SAP disclosed in a statement on Monday. SAP said the timing of the U.S. listing will be determined later and as a majority stakeholder, the German software group will look into fully merging Qualtrics's results and stated there would be no effect on its current year guidance.
