Qualtrics files for US IPO two years after sale to SAP

Going public: Smith has agreed on Dec 8 to buy six million shares – or about 1% of that outstanding stock – for US$20 per share, according to the filing. — AP

NEW YORK: Qualtrics International Inc has filed for what could be one of the first US initial public offerings of 2021, just over two years after it was acquired by German software giant SAP SE.

The company, which makes customer-survey software, said in a filing Monday it plans to sell an undetermined number of shares for US$20 to US$24 each.

Its paperwork with the US Securities and Exchange Commission listed a placeholder amount of US$100mil, which will likely change once it sets the amount of stock that it plans to market.

At the top end of that range, the IPO would value Qualtrics at about US$14.4bil on a fully diluted basis, based on about 600 million shares to be outstanding after the listing. Qualtricsco-founder and former chief executive officer Ryan Smith agreed on Dec 8 to buy six million shares – or about 1% of that outstanding stock – for US$20 per share, the filing shows.

SAP shares rose as much as 1.8% yesterday.

SAP agreed to pay US$8bil for Qualtrics in November 2018 in its biggest ever deal, in an effort to compete with rivals such as Salesforce.com Inc.

Taking Qualtrics public marks a shift in SAP’s strategy under CEO Christian Klein, who secured the top job at the company in April.

When former CEO Bill McDermott announced the purchase –- topping off a US$26bil acquisition spree to push SAP into cloud-based software and services – investors sent its shares down 4.7% as they balked at the price tag.

SAP is seeking to maintain ownership of at least three quarters of Qualtrics after the IPO, Bloomberg News reported in July.

Qualtrics also revealed in the filing that investment firm Silver Lake agreed on Dec 23 to buy US$550mil of shares of its Class A common stock in a private placement, including US$225mil in stock at the IPO price and the rest at US$21.64 per share.

Qualtrics reported a net loss of US$258mil on total revenue of US$550mil for the nine months through September, compared to a net loss of US$860mil on revenue of US$418mil in the same period a year earlier.

The loss in 2019 is partly attributable to the one-time cost of paying employees for their shares in cash at the time of the acquisition, according to sources.

Smith, who is now the executive chairman of Qualtrics, agreed this year to buy a majority stake in the National Basketball Association’s Utah Jazz, and other sports and entertainment properties, from Gail Miller and the Miller family.

Morgan Stanley and JPMorgan Chase & Co are leading the listing.

Qualtrics plans to list its shares on the Nasdaq Global Select Market under the ticker XM. — Bloomberg