SAP unit Qualtrics leads for IPO

Provo, Utah-based Qualtrics, set an initial price range of between $ 20 and $ 24 in a regulatory filing Monday, which the company would value on a fully diluted basis at between $ 12 billion and $ 14.4 billion, according to one person who is familiar with the matter. Prices may change based on investor feedback up to the day before a company’s stock is traded.

SAP CEO Christian Klein said in July that the company would make Qualtrics public while remaining the majority shareholder. The deal, he said, would allow Qualtrics to better exploit non-SAP business opportunities.

Qualtrics shares are traded on the Nasdaq under the ticker symbol ‘XM’. SAP will retain a majority stake in Qualtrics after the planned IPO, including all of the Company’s Class B shares giving the additional voting rights.

The listing comes amid a tumultuous period of the German technology company, partly caused by the pandemic. SAP exited its dual chief executive structure in April, less than six months after embracing the leadership model. It said the move was to speed up decision-making during the health crisis after the company scrapped its annual guidance. In October, the Walldorf, Germany-based company again cut its outlook as coronavirus cases started to rise again.

SAP’s acquisition of Qualtrics, which was completed in 2019, helped the company improve its competitive position in the cloud computing market, SAP said. Shares of companies offering cloud services, such as Snowflake Inc.

and ServiceNow Inc.,

run by former SAP CEO Bill McDermott, soared during the pandemic as more companies embraced such services. SAP shares are down 12.5% ​​this year.

In its filing, Qualtrics said Silver Lake would purchase $ 550 million of its shares, including 15 million shares at $ 21.64 per share and the remainder at the IPO price as part of the offering. Silver Lake provided funding to Airbnb earlier this year Inc.

with warrants that, when exercised, would value the company at $ 18 billion. Airbnb was valued at $ 47 billion on a fully diluted basis at the IPO price when it debuted in December. The stock price has more than doubled since it debuted.

Qualtrics said in the regulatory filing that this year’s revenue rose to $ 415 million through the end of September, up $ 309 million from the same period last year. It posted a net loss of $ 258 million for the first nine months, compared to a loss of $ 860.4 million in the same period a year earlier.

Qualtrics said it has more than 12,000 customers and more than 3,300 employees in more than 25 countries. The company was founded in 2002 by Ryan Smith, who was CEO until this summer and will remain the chairman of the company. Zig Serafin, a former Microsoft Corp.

executive, took over the position of CEO in July.

The planned IPO will help crown a year in which technology companies have seen their valuations rise to the highest level since the dotcom bubble of the early 2000s. Airbnb is now estimated to be worth about $ 93 billion, far more than traditional accommodation companies like Marriott International Inc.

or Hilton Worldwide Holdings Inc.

Snowflake Inc., a data warehousing company that made its trading debut in September, is worth more than 180 times the $ 89 million in revenue earned in the 12 months to October.

Write to Matt Grossman at [email protected] and Maureen Farrell at [email protected]