SAP Unit Qualtrics Heads for IPO

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

SAP CEO Christian Klein said in July that the company would disclose Qualtrics, while still being the majority shareholder. According to Qualtrics, the agreement will be better able to utilize non-SAP business opportunities.

Qualtrics shares will trade on the Nasdaq under the symbol “XM”. SAP will retain a controlling interest in Qualtrics as a result of the planned exchange, including all of the company’s Class B shares, which will provide additional voting rights.

The listing comes amid a turbulent period of German technology company, partly due to the pandemic. In April, SAP dropped its dual CEO, less than six months after adopting the leadership model. The move is said to be aimed at speeding up decision-making during the health crisis after the company cut its lead over the full year. In October, the Walldorf, Germany-based company, again slashed its outlook as coronavirus cases began to increase again.

SAP’s acquisition of Qualtrics, which was completed in 2019, helped the company improve its competitiveness in the cloud computing market, SAP said. Shares of cloud services companies like Snowflake Inc.

and ServiceNow Inc.,

management by former SAP CEO Bill McDermott rose during the pandemic as more businesses accepted such services. SAP’s shares fell 12.5% ​​this year.

In the submission, Qualtrics said Silver Lake would buy $ 550 million of its stock, including 15 million shares at $ 21.64 per share and the rest at the IPO price as part of the offer. Silver Lake provided pandemic-hit Airbnb funding earlier this year Inc.

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

Qualtrics, which was filed in the regulations, said the year’s sales rose to $ 415 million by the end of September, from $ 309 million in the previous year. It recorded a net loss of $ 258 million for the first nine months, compared to a loss of $ 860.4 million in the same period a year earlier.

Qualtrics said it has more than 12,000 customers and more than 3,300 employees spread across more than 25 countries. The company was founded in 2002 by Ryan Smith, who served as CEO until this summer and is still the chairman of the company. Zig Serafin, a former Microsoft Corp.

CEO, took over as CEO in July.

The planned stock market move helps with a year in which technology companies see their valuations rise to the highest level since the dot-com bubble of the early 2000s. Airbnb is now valued at about $ 93 billion, far more than traditional accommodation establishments such as Marriott International Inc.

of Hilton Worldwide Holdings Inc.

Snowflake Inc., a data storage company that made its debut in September, is worth more than 180 times the revenue of $ 89 million in the twelve months to October.

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