The sell-off of Qualtrics, a hot startup before SAP bought the company in 2018, made the founders rich but it never truly fit into SAP’s larger vision. The spinoff happened just two years later and was followed by a public offering in 2021.
The company has had multiple offers to go private since its 2016 initial public offering, with Silver Lake and the Canadian Pension fund being two of the most recent investors. However, the financial crisis has cast a shadow over the company’s stock and it is now valued at just $18.15 per share. If this offer is accepted by shareholders, it would value HelloSign at $2.5 billion and increase its workforce to 1,000 employees.
Both the company and Silver Lake argue that their exclusive agreement bolsters rather than weakens SAP’s position in the market. The arrangement theoretically prevents any other company from offering software services to businesses, making it more difficult for rivals to enter the market and poach customers away from monopoly SAP.
The SAP CEO said that the company was very happy with the offer it received from the potential buyer. She stressed that there were still a few steps to go before this deal could be finalized, but she was confident that it would happen soon.
The company has been through a lot of changes since its inception. Originally founded in 1993 by Softbank, the company was bought by SAP in 2000 for $4.6 billion. It’s been a long journey for the company, but it finally reached profitability earlier this year and is on its way to recouping its initial investment.
Interestingly, SAP is selling off its business in enterprise software to Silver Lake for a reported $5.3 billion. VMware, meanwhile, is in the midst of negotiating a potentially massive acquisition with Broadcom. This deal could very well bring SAP some much-needed cash, and give VMware the firepower it needs to compete with the likes of Amazon Web Services and Google Cloud Platform.
In the age of big data, there’s no denying that access to customer data is princes among perks for businesses looking to thrive. And while SAP wasn’t the only company lumbering in with a massive buyout offer in 2018, they were by far the biggest. This gave Bill McDermott and his team at Qualtrics an unprecedented level of access to sensitive information about their customers. In a way, it was almost too good to be true – and for most companies, it would’ve been. ButQualtrics didn’t shy away from taking the offer – they knew that it could help them grow faster than ever before.
The complexities of SAP’s then-ongoing transition to the cloud may have been partially to blame for McDermott’s departure, as it seems he was not as attached to SAP’s oft-competed product offerings as his predecessor had been. Christian Klein, his successor, may have been better equipped to take on SAP’s increasingly competitive markets.
Constellation Research analyst Holger Mueller told us that, even after the spinout, the company would still reap some of the benefits from its acquisition with Klein seeing it as a way to recoup some of her investment. This suggests that she was not completely against the idea of a spinoff in the first place and may have only opposed it because she wanted more control over its future.
Qualtrics maintains its dominant market share in the survey analysis software industry despite being acquired by SAP in 2016. The merger broadens Qualtrics’ customer base and opens up new opportunities for the company to partner with other ERP vendors.
Qualtrics is a customer experience company that provides firms with the ability to gather customer feedback. Through customer surveys, the company can ascertain how satisfied customers are with their experiences and whether or not there are any areas where improvements could be made. Additionally, QualtrICS’s sentiment analysis capabilities can help organizations understand the mood of their employees. By understanding both positive and negative sentiments, companies can make informed decisions about how best to serve their customers.
The news of the stock’s gain has investors optimistic about the future, with some predicting that it could reach $100 per share within the next five years.
