SAP SE Sees Experience Management as the Future of Business and Acquires Qualtrics International Inc.

By Ebele Maduekwe

Acquisition or Partnership

SAP SE and Qualtrics International Inc. announced they have entered into a definitive agreement under which SAP SE intends to acquire Qualtrics, a pioneer of the experience management (XM) software category.

Under the terms of the agreement, SAP will acquire all outstanding shares of Qualtrics for US$8 billion in cash.  SAP has secured financing in the amount of €7 billion to cover purchase price and acquisition-related costs.  The purchase price includes unvested employee incentive compensation and cash on the balance sheet at close.  Subject to customary closing conditions and attainment of regulatory clearances, the acquisition is expected to close in the first half of 2019.  The Boards of Directors of SAP and Qualtrics have approved the transaction.  Qualtrics’ shareholders have also approved the transaction.

XM focuses on obtaining and tapping the value of outside-in customer, employee, product and brand feedback.  Combining Qualtrics’ experience data and insights with SAP’s operational data will help enable customers to better manage supply chains, networks, employees and core processes.  Together, SAP and Qualtrics will deliver an end-to-end experience and operational management system to power organizations.

Qualtrics expects full-year 2018 revenue to exceed US$400 million and projects a forward growth rate of greater than 40 percent, not including potential synergies of being part of SAP.

Following the closing of the transaction, Qualtrics is expected to maintain its leadership, personnel, branding and culture, operating as an entity within SAP’s Cloud Business Group.  Qualtrics is expected to continue to maintain dual headquarters in Provo, Utah, and Seattle, Washington.

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