SAP Plans IPO for Qualtrics; Christian Klein Quoted

SAP Plans IPO for Qualtrics; Christian Klein Quoted

SAP will retain majority ownership of the new spin out. "We decided that an IPO would provide the greatest opportunity for Qualtrics to grow", SAP CEO Christian Klein stated in the release announcing the news.

"SAP will remain Qualtrics' largest and most important go-to-market and research and development partner while giving Qualtrics greater independence to broaden its base by partnering and building out the entire experience management ecosystem".

Recently, "as businesses sell more online and need to track customers and employees remotely, SAP's e-commerce units and Qualtrics have proven bright spots, RBC Capital Markets analyst Alex Zukin wrote in a note earlier in July". As majority owner, the German company plans to continue to fully consolidate Qualtrics' results and said there will be no effect on 2020 guidance.

SAP said in the statement that the USA firm has been able to operate with greater independence within the German software giant's cloud portfolio than other companies that it had previously acquired.

Yet with the market rallying hard since the deal, analysts at Jefferies said Qualtrics could be valued at as much as Euro 14 billion (roughly Rs. 1.22 lakh crores) if priced in line with tech growth stocks now trading at 30 times revenue. Qualtrics was the capstone of former CEO Bill McDermott's $26 billion shopping spree to help push the 48-year-old software giant into faster-growing cloud-based software and services.

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McDermott had defended the deal, believing that combining SAP's workforce and a trove of operational data with Qualtrics's customer experience feedback would accelerate growth. Smith intends to be Qualtrics' largest individual shareholder.

SAP shares rose 3.5% to 140.40 euros in Frankfurt trading at 10:34 a.m.

SAP's press statement is vague, but the implication is that the move will offer Qualtrics more flexibility to engage with customers and partners outside of its parent company's dominion. SAP said only that "a final decision on the IPO and its conditions and timing is pending and subject to market conditions".

Ya think? Maybe we should do a survey about that ...

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