German software major SAP AG (SAP) announced Monday its agreement to sell all of its 423 million shares of Qualtrics International Inc. (XM), an experience management software company.
The deal is part of the $12.5 billion all-cash acquisition of Qualtrics by funds affiliated with Silver Lake as well as Canada Pension Plan Investment Board or CPP Investments. SAP’s stake will be acquired for around $7.7 billion.
SAP will get $18.15 in cash per share it holds. The deal price represents a 73% premium to the 30-day volume-weighted average price on January 25, the last full trading day prior to SAP’s announcement to explore a sale of its stake in Qualtrics.
SAP then said its plan to explore a sale of its stake in Qualtrics was in line with its strategic initiative to streamline its portfolio, and to focus more on its core cloud growth and profitability. The move would be a continuation of its strategy announced at the time of the Qualtrics IPO in 2021.
The transaction has been approved by the Qualtrics board, including a committee of independent directors, as well as the SAP Executive and Supervisory Boards.
While the deal is subject to customary regulatory clearances and expected to close in the second half of 2023, SAP’s financial results for the first quarter, due April 21,would present Qualtrics as a discontinued operation.
Christian Klein, CEO and Member of the Executive Board of SAP SE, said, “Silver Lake has both the operational expertise and the track record with software companies to help Qualtrics extend its leadership in the XM category it pioneered. Since we acquired Qualtrics in 2019 the company has more than tripled its revenue while delivering profitability. SAP intends to remain a close go-to-market and technology partner, servicing joint customers and continuing to contribute to Qualtrics’ success.”
In the deal, Barclays acted as financial advisor to SAP, and Shearman & Sterling acted as SAP’s legal advisor.
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