SAP will buy the American Software company, Qualtrics for $8B. The announcement was made public on Sunday. SAP completed the all-cash deal just before Qualtrics planned IPO. Shareholders of Qualtrics and Boards of both companies have given a green signal towards the acquisition.
The acquisition is expected to end in the first half of 2019. Both the companies will look forward to foraying into CRM (customer relationship management) software, other big players like Salesforce has dominated the CRM software market and with competitors like Microsoft looking to catch up.
Qualtrics recorded revenue growth by 41.7 percent ($184.2M) in the first half of 2018. Qualtrics rivals SurveyMonkey, another software company which grew just by 14 percent ($ 121.2M) in the same period. Therefore, Qualtrics is much ahead of SurveyMonkey in terms of growth and has generated more profit.
In 2002, Qualtrics was established by two brothers Ryan and Jared Smith along with their father Scott and another person called Stuart Orgill. As of September 2018, the company has 1,915 employees. Apart from its 9000customers, the company deals with MasterCard, Kellogg, Under Armour, BlackRock,and Microsoft.
The latest acquisition marks the second biggest deal for SAP. In October the company’s revenue jumped by 41 percent in the third quarter cloud revenue. Now, the company expects to increase its revenue from 7.5 percent to 8.5 percent by the end of 2018.
Apart from the acquisition, SAP is working on the launch of new cloud products for growing its business as the transition away from traditional desktop software has taken business from its core enterprise resource planning business.