Selling a company just two years after buying it is rarely a good look. Yet in the case of German software giant SAP, floating Qualtrics — the US survey software maker it acquired for a heady $8bn — is a smart move. Optics matter less when a bull run in technology stocks is bloating sector valuations.
SAP plans to sell an undetermined number of Qualtrics shares for $20 to $24 each. At the top end that would value the company at about $14.4bn on a fully diluted basis.
SAP will remain the majority shareholder after the sale. But a spin-off would nonetheless offer a salve to investors who fretted at the costly M&A adventure. Questions were raised about the rationale from the get-go. Like a geography teacher at the school disco, elbow patched and arms flailing out of time to the music, SAP is a legacy enterprise software company that desperately wanted to be down with the kids. Fast growing Qualtrics — which makes software to survey customer and employee feedback and competes with the likes of SurveyMonkey — seemingly offered a way in. It was supposed to be at the heart of SAP’s push into cloud services.