German-based software giant SAP has announced its intention to acquire experience management company Qualtrics for $8bn in cash, just before it was slated to go public. The sale is set to be completed in early 2019, as SAP has already secured financing to the tune of €7bn ($7.87bn) to cover Qualtrics' price-tag and other acquisition-related costs.
SAP CEO Bill McDermott has expressed nothing but optimism following the announcement, comparing the synergizing possibilities SAP will achieve by combining its operational data with Qualtrics', to Facebooks' acquisition of Instagram six years ago. "The legacy players who carried their '90s technology into the 21st century just got clobbered.
"We have made existing participants [such as Oracle, Salesforce.com and Microsoft] in the market extinct," he added.
According to SAP, 77% of the world's transaction revenue utilizes its software. McDermott explained that with the integration of Qualtrics customer sentiment and employee engagement data insights, SAP will be able to take their service to the next level.
This acquisition marks the second largest ever IPO? of a SaaS company, following Oracle's $9.3bn acquisition of NetSuite in 2016. Qualtrics will join SAP's Cloud Business Group but the firm's CEO and co-founder Ryan Smith will stay on as CEO and retain its US headquarters and personnel.