SAP Unit Qualtrics Heads for IPO

German business software giant


SAP 3.85%

said it would return Qualtrics International Inc. to public markets, in a listing expected to value the business at least 50% above what it paid for the startup two years ago.

Provo, Utah-based Qualtrics, in a regulatory filing Monday, set an initial price range of between $20 and $24, which would value the company on a fully diluted basis between $12 billion and $14.4 billion, according to a person familiar with the matter. Pricing can change based on investor feedback until the day before a company’s stock starts trading.


Christian Klein

in July said the company would take Qualtrics public while remaining the majority shareholder. The deal, he said, would allow Qualtrics to better pursue non-SAP business opportunities.

Qualtrics shares will trade on the Nasdaq under the ticker symbol “XM.” SAP will retain a controlling stake in Qualtrics following the planned IPO, including all of the company’s Class B shares that give it extra voting rights.

The listing comes amid a tumultuous period of the German tech company, in part brought on by the pandemic. SAP in April abandoned its dual-chief-executive structure, less than six months after embracing the leadership model. It said the move was aimed at expediting decision-making during the health crisis after the company cut its full-year guidance. In October, the Walldorf, Germany-based company again cut its outlook as coronavirus cases began to surge again.

SAP’s acquisition of Qualtrics, which closed in 2019, helped the company improve its competitiveness in the cloud-computing market, SAP has said.  Shares of companies that provide cloud services, such as

Snowflake Inc.


ServiceNow Inc.,

run by former SAP CEO

Bill McDermott,

have surged during the pandemic as more businesses have embraced such services. SAP’s shares are down 12.5% this year.

In its filing, Qualtrics said that Silver Lake would purchase $550 million of its stock, including 15 million shares at $21.64 per share and the remainder at the IPO price as part of the offering. Silver Lake, earlier this year, provided financing to pandemic-hit

Airbnb Inc.

with warrants that, when exercised, would value the company at $18 billion. Airbnb was valued at $47 billion on a fully diluted basis at its IPO price when it made its debut in December. Its stock price has more than doubled since it made its debut.

Qualtrics, in the regulatory filing, said this year’s sales through the end of September rose to $415 million, up from $309 million over the year-prior period. It recorded a $258 million net loss for the first nine months, compared with a $860.4 million loss in the same period a year earlier.

Qualtrics said it has more than 12,000 customers, and over 3,300 employees spread across more than 25 countries. The company was founded in 2002 by

Ryan Smith,

who served as chief executive until this summer and remains the company’s chairman. Zig Serafin, a former

Microsoft Corp.

executive, took over as CEO in July.

The planned IPO helps cap a year in which tech companies have seen their valuations soar to the highest levels since the dot-com bubble of the early 2000s. Airbnb is now valued at around $93 billion, far more than traditional lodging companies such as

Marriott International Inc.

or Hilton Worldwide Holdings Inc.

Snowflake Inc., a data-warehousing company that held its trading debut in September, is worth more than 180 times the $89 million in revenue is earned in the 12 months to October.

Write to Matt Grossman at [email protected] and Maureen Farrell at [email protected]

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