Benzinga | Jul 26, 2020 05:55PM EDT

SAP Announces Intent to Take Qualtrics Public through U.S. IPO

SAP SE(NYSE:SAP) today announced its intentto takeQualtricspublicthrough an initial public offering (IPO)in the United States.Qualtricsisthe market leader andcreator of theExperience Management(XM)category, a large, fastgrowing and rapidlyevolving market.SAPintends to remain the majority owner ofQualtrics.SAP'sprimary objectivefortheIPO is to fortifyQualtrics' ability to capture its full market potential within Experience Management.This will help toincreaseQualtrics'autonomy andenableit to expanditsfootprint both withinSAP's customer base and beyond.

"SAP's acquisitionofQualtricshas been a great success and has outperformedourexpectations with 2019 cloud growth in excess of 40%,demonstratingvery strong performance in the current setup," SAPCEOChristian Kleinsaid."AsRyan Smith,Zig Serafinand I worked together,wedecidedthat an IPOwould providethe greatestopportunityforQualtricstogrowthe experience managementcategory, serve its customers, explore its own acquisition strategy, and continuebuildingthe best talent.SAPwillremainQualtrics' largest and most importantgo-to-marketandresearch and development(R&D)partnerwhilegivingQualtricsgreaterindependencetobroaden its base bypartneringand building outthe entire experience managementecosystem."

Qualtrics, which is part ofSAP's cloud portfolio, has operated with greater autonomy than other companiesSAPhadpreviously acquired.The founder and current management team ofQualtricswill continue to operate the company.

"When we launched theExperienceManagement category, our goal was always tohelp as many organizations as possible leverage the XM Platformasasystem of action,"Qualtricsfounder Ryan Smith said."SAPis an incredible partner with unprecedented globalreach,and we couldn't be more excited about continuing the partnership.This will allow ustocontinuebuilding out the XM ecosystem across a broad array of partners."

SAPagreed toacquireQualtricsjust four days beforeQualtricswas to go publicin 2018, recognizing the potential ofbringingtogether experience and operational data(X+O)tohelp organizations take action.SAPcurrently owns 100% ofQualtricsshares.SAPwill retain majority ownership ofQualtricsand has no intention of spinning off or otherwise divesting its majority ownership interest. Ryan Smith intends to beQualtrics' largest individual shareholder.

SAPisfully committed to Experience Management and theQualtricsXMPlatform(tm)as a key element of its Intelligent Enterprise Strategy.SAPwill remainQualtrics' closest and most importantco-innovationand go-to-market partner.

Afinal decision on the IPO and its conditions and timing is pendingand subject to market conditions.

SinceSAP, as majority shareholder,willcontinue tofullyconsolidateQualtrics, thetransactionisnotexpected to have an impact onSAP's2020 or longer-termfinancialtargets.