SAP to Spin off Qualtrics, Partly Unwinding $8 Billion Buy
Business software group SAP plans to spin off and float Qualtrics, the U.S. specialist in measuring online customer sentiment that it acquired less than two years ago for $8 billion.
The move to list Qualtrics in the United States would partly unwind former CEO Executive Bill McDermott’s last big takeover and rebalance SAP back towards its German roots under successor Christian Klein.
McDermott was criticised by investors at the time for overpaying for Qualtrics, which under founder Ryan Smith had been four days away from floating when SAP trumped the valuation it had hoped to achieve on the stock market.
Yet with the market rallying hard since the deal, analysts at Jefferies said Qualtrics could be valued at as much as 14 billion euros ($16 billion) if priced in line with tech growth stocks now trading at 30 times revenue.
Investors reacted by pushing SAP shares 3.9% higher, closing in on record highs, as Klein sought to close a chapter of management turmoil triggered by the Qualtrics deal.
News of the spinoff came before SAP published full second-quarter results on Monday that confirmed the leader in enterprise resource planning software in the second quarter had bounced back from the coronavirus pandemic.
Non-IFRS operating profit rose 7% to 1.96 billion euros at constant currency on a 1% increase in total revenue. SAP restated its 2020 outlook for a rise of between 1% and 6% in operating profit.
Neha writes articles on sectors including medicine, food, materials, and science & technology. A qualified statistician, she has the ability to observe and analyze the trends in global markets and write compelling articles that help CXOs in decision making. She is a bookworm and loves to read fiction, lifestyle, science and technology. Neha comes with 6 years of experience in content writing and editing that involves blog writing, preparation of study materials and OERs.