SAP said Sunday it would sell some shares of its survey software unit Qualtrics in a US public market. The announcement comes less than two years after SAP announced a plan to buy Qualtrics for $ 8 billion, days before Qualtrics went public as an independent company.
The move represents a change of direction for the German business software company not long after its leader in recent years, Bill McDermott, left. Qualtrics was SAP’s largest acquisition to date, according to FactSet.
Christian Klein, CEO of SAP, said in a statement that the acquisition was successful and that a sale of shares could expand Qualtrics’ overall market, where it competes with SurveyMonkey. SAP did not provide a date for the sale of shares.
Klein became co-CEO of SAP in October alongside Jennifer Morgan. The two replaced McDermott, who became CEO of ServiceNow after leading SAP since 2010. Morgan resigned from her position in April, leaving Klein as the sole CEO.
Under McDermott, SAP did great business that expanded its capabilities. He purchased SuccessFactors, Concur, and Ariba in addition to Qualtrics.
Qualtrics went public in October 2018, revealing that in the second quarter it had generated $ 975,000 in revenue over $ 97 million in revenue. Three weeks later, SAP said it had agreed to buy Qualtrics.
In the second quarter of this year, Qualtrics contributed to the growth of the SAP cloud, according to preliminary SAP results. Revenue from cloud services diversifies SAP away from revenue from software licenses and support. SAP’s business software pairs IBM, Microsoft and Oracle have also been more focused on cloud products in recent years.
SAP will be Qualtrics’ largest shareholder and does not intend to spin off the stake, according to the statement. The two companies will continue to work together after the initial public offering, SAP said. Qualtrics leaders, including founder Ryan Smith, will continue to lead Qualtrics.
“We believe that many SAP investors do not fully understand Qualtrics or its vision for the future and this would probably help at least in terms of a better understanding of its value,” Mark Moerdler and Firoz Valliji of Bernstein Research, who have the equivalent from a SAP stock purchase rating, he wrote in a note distributed to customers on Sunday.
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