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PROVO — In late 2018, Qualtrics was acquired for $8 billion by SAP, a German multinational software corporation, just weeks after the company filed to go public. It was a landmark deal for the state — a local homegrown company being acquired in one of the biggest deals in history. And one that gave Qualtrics momentum to keep growing.
Nearly two years later, SAP doesn't think Qualtrics' growth is over. And they think the best route for that is to follow Qualtric's original plan: take the company public.
On Sunday, SAP announced its intention to take Qualtrics public in what is expected to be the highest IPO in Utah history.
In a press release SAP stated its primary objective for the IPO is to fortify Qualtrics’ ability to capture its full market potential. SAP will be the majority owner, but going public will allow the Provo tech startup to have more autonomy allowing it to acquire other companies and expand its footprint.
SAP said it has no intention of spinning off or otherwise divesting its majority ownership interest, a press release said. Qualtrics founder Ryan Smith intends to be the largest individual shareholder.
“SAP’s acquisition of Qualtrics has been a great success and has outperformed our expectations with 2019 cloud growth in excess of 40%, demonstrating very strong performance in the current setup,” SAP CEO Christian Klein said in a statement.
Together with Smith, SAP decided an IPO would provide the greatest opportunity for Qualtrics to grow. Smith along with the current management team will continue to operate the company. Qualtrics has already operated with greater autonomy than other companies SAP has acquired.
In early 2017, Qualtrics announced the XM platform, a software that allows companies to find the gaps between what they’re providing and what they should be providing. The software collects and analyzes data to tell companies what they can do to improve advertising, prioritize features, predict market trends and monitor a customer and employee experience.
That may sound complex — and it’s why Qualtrics was not only acquired for such a high amount but why SAP now believes it has the ability to expand even further. A lot of businesses are willing to pay a lot of money to know things they didn’t before. And Qualtrics helps them get that information.
“When we launched the Experience Management category, our goal was always to help as many organizations as possible leverage the XM Platform as a system of action,” Qualtrics CEO and co-founder Ryan Smith said in a statement. “SAP is an incredible partner with unprecedented global reach, and we couldn’t be more excited about continuing the partnership. This will allow us to continue building out the XM ecosystem across a broad array of partners.”
The deal is a come-full-circle moment for Qualtrics. In 2018, SAP agreed to acquire Qualtrics just four days before the company was set to go public. Smith said at the time that it was the second-largest private tech acquisition in history, trailing only Facebook’s acquisition of messaging app WhatsApp for $19 billion in 2014.
A final decision on the IPO and its timing is pending and subject to market conditions.