German-based international software giant SAP has reportedly agreed upon acquiring an experience management company called Qualtrics. The particular deal is an all-cash deal and has been amounted for $8 billion.
This acquisition has taken place just before the survey and research software company was set to go public. This deal is expected to be closed in the first half of 2019.
Prior to this acquisition, the company had raised $180 million at a $2.5 billion valuation. And this acquisition marks as the second-largest ever acquisition of a SaaS company, after Oracle’s purchase of Netsuite for $9.3 billion in 2016.
The software giant SAP claims that its software has touched 77 percent of the world’s transaction revenue, while Qualtrics’ products include survey software that enables its 9,000 enterprise users to gauge things like customer sentiment and employee engagement.
“The legacy players who carried their ‘90s technology into the 21st century just got clobbered. We have made existing participants in the market extinct,” SAP CEO Bill McDermott said.
Following the deal, Qualtrics co-founder Ryan Smith will continue to serve as its CEO, and after the acquisition is finalized, the company will become part of SAP’s Cloud Business Group, but retain its dual headquarters in Provo, Utah and Seattle, as well as its own branding and employees.
This year, Qualtrics’ revenue grew 8.5 percent from $97.1 million in the second-quarter to $105.4 million in the third-quarter, according to its IPO filing. It reported third-quarter GAAP net income of $4.9 million.
Qualtrics grew its operating cash flow to $52.5 million in the first nine months of 2018, compared to $36.1 million during the same period in 2017. Also, the company said it expects its full-year 2018 revenue to exceed $400 million and forecasts a forward growth rate of more than 40 percent.