decor decor
"A business absolutely devoted to have service will only have one worry about profits. They will be embarrassingly large."

-Henry Ford

SAP to Acquire Qualtrics

martinwolf Transaction Analysis
Financial Information*
  • Enterprise Value                                     $8.0B
  • EV/LTM Revenue                                     21.5x
  • EV/LTM EBITDA                                         N/M
Transaction Facts
  • ERP giant SAP announced yesterday that it was acquiring research and survey SaaS provider Qualtrics for $8 billion.
  • The deal comes just days before Qualtrics’ planned IPO, at an indicated price of $18 – $21 per share (suggesting a market cap of $4.5 billion excluding shares available to the underwriters).
  • Qualtrics expects 2018 revenue to exceed $400 million, and to grow more than 40% next year before synergies.
  • The transaction is expected to be completed in the first half of 2019.
martinwolf Analysis
  • Go Big or Go Home: This is a Big Deal by many measures. It is SAP’s second largest (following its $8.3 billion acquisition of Concur Technologies in 2014), and is the second-largest acquisition of a SaaS company after Oracle’s 2016 acquisition of Netsuite for $9.3 billion.
  • A VC Success Story: Qualtrics’ three venture capital investors are seeing a strong returns on their investments. Accel and Sequoia today own 16% and 9%, each having initially invested $35 million at $350 million valuations–and Insight Venture Partners owns 15% from a subsequent round of financing.
  • Adding to the Arsenal: Qualtrics specializes in what it calls “Experience Management” or “XM”–largely data collection and feedback. As SAP is primarily an ERP company concerned with managing internal systems, this acquisition will make it more competitive with CRM market leaders such as Salesforce.
  • A Year of Big Software Buys: This deal follows IBM’s recent acquisition of Red Hat for $33 billion, as well as major moves from several top players. Microsoft acquired Github for $7.5 billion in June, while Salesforce bought cloud application builder Mulesoft for $6.5 billion in March.
For more information about this transaction, click here to read the press release.
 
*Financial information from Factset.
 

martinwolf  

was not the advisor in this transaction.
previous post Back to Articles next post

24 Apr 2024

Celestica (NYSE: CLS) to Acquire NCS Global from Heritage Holding

Financial Information Enterprise Value: $36M (and a possible earnout payment should certain post-closing financial conditions be met) Transaction Details Celestica has entered into a definitive agreement to acquire NCS Global, a US-based IT infrastructure and asset management business. The transaction is expected to close in May 2023 or earlier, subject to satisfaction of customary closing...

02 Apr 2024

CD&R to Acquire Presidio from BC Partners

Financial Information Not Disclosed Transaction Details Clayton Dubilier & Rice (CD&R) and BC Partners announced on April 2, 2024, that they have entered into a definitive agreement under which CD&R will acquire a majority ownership of Presidio. Funds affiliated with BC Partners will retain minority ownership interest. The transaction is expected to close in the...

06 Feb 2024

NWN Carousel acquired by American Securities

Financial Information Revenue: Approx. $900 million Enterprise Value: N/A Transaction Details NWN Carousel announced a transition of ownership from New State Capital Partners to affiliates of American Securities. This transition represents the success of significant investment, organic growth, M&A execution, operational excellence and innovation under ownership of New State Capital Partners. NWN Carousel developed a...