Qualtrics Files for U.S. IPO Two Years After Sale to SAP

(Bloomberg) -- Qualtrics International Inc. filed for what could be one of the first U.S. 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 $20 to $24 each. Its paperwork with the U.S. Securities and Exchange Commission listed a placeholder amount of $100 million, 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 $14.4 billion on a fully diluted basis, based on about 600 million shares to be outstanding after the listing. Qualtrics’s co-founder and former Chief Executive Officer Ryan Smith agreed on Dec. 8 to buy 6 million shares -- or about 1% of that outstanding stock -- for $20 per share, the filing shows.

SAP shares rose as much as 1.8% on Tuesday.

SAP agreed to pay $8 billion 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 $26 billion 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 $550 million of shares of its Class A common stock in a private placement, including $225 million in stock at the IPO price and the rest at $21.64 per share.

Qualtrics reported a net loss of $258 million on total revenue of $550 million for the nine months through September, compared to a net loss of $860 million on revenue of $418 million 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 people familiar with the matter.

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.

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