SAP is selling its shares in the US market research subsidiary Qualtrics to the US financial investor Silver Lake and the Canadian pension fund CPP Investments. SAP received around 7.7 billion US dollars (7.2 billion euros) for the share sale, the group announced on Monday. With the sale of the data collection and analysis company acquired in 2018, CEO Christian Klein is refocusing the DAX heavyweight more on its core business of corporate management software.
SAP expects the sale to be completed in the second half of the year. In the afternoon, the SAP share was down 2.7 percent with the very weak leading German index.
According to traders, business was as expected. The sale is positive and also limits the risk of achieving operating earnings targets this year, wrote analyst Nay Soe Naing from Berenberg Bank. Although Qualtrics had grown rapidly under the SAP umbrella and was recently profitable, its low margins diluted the group’s results.
Silver Lake and CPP Investments are paying $18.15 per share. SAP is thus accepting an offer from last week, which it said was the most attractive offer. Official approvals are still pending. In its own numbers, SAP will now report the company as a discontinued operation. In the offer, Qualtrics is valued at around $12.5 billion, including debt. The Qualtrics Board of Directors has approved the sale. Qualtrics shares gained more than 6 percent from $17.58 in the US after the afternoon session.
At the end of January, the Walldorf group announced that it wanted to sell Qualtrics under suitable conditions. SAP bought the company for $8 billion in 2018 under its then-boss Bill McDermott. However, there was no breakthrough in market research to attack US rival Salesforce in its domain of sales and customer management software.
As early as 2021, under the new boss Christian Klein, SAP had detached itself from the subsidiary and brought parts of it to the stock exchange. According to the information at the time, SAP had already pocketed 2.4 billion dollars with the sale of shares related to the IPO. According to information from the financial news agency dpa-AFX, the investment in Qualtrics ultimately resulted in net income of around $1.4 billion.
The selling price of $18.15 means a significant premium to the course before Walldorfer’s intention to sell became known. But Qualtrics stock had been underperforming for an extended period of time. SAP took Qualtrics public in January 2021 for $30 per share, and in the months that followed, the price climbed to a good $49 before gradually falling. Before the sales plans were announced, the paper was only worth a good $11.