German business software group, SAP said on Sunday it planned to float Qualtrics, the U.S. specialist in measuring online customer sentiment, which it acquired in late 2018 for $8 billion.
The move to float Qualtrics in the United States would partly unwind the final major acquisition of former Chief Executive Bill McDermott’s tenure and rebalance SAP back towards its German roots under successor Christian Klein.
“SAP’s primary objective for the IPO is to fortify Qualtrics’ ability to capture its full market potential within Experience Management,” SAP said in a statement issued on Sunday night, referring to the Qualtrics product.
“This will help to increase Qualtrics’ autonomy and enable it to expand its footprint both within SAP’s customer base and beyond.”
McDermott was criticised by investors for overpaying for Qualtrics, which under founder Ryan Smith had been close to floating when SAP trumped the valuation it had hoped to achieve on the stock market.
A year after the deal, Klein and former marketing chief Jennifer Morgan succeeded McDermott as co-CEOs. The arrangement proved to be short-lived, however, and Morgan – a vocal advocate of the Qualtrics deal – left earlier this year.
Klein called the takeover a success on Sunday, highlighting the 40% sales growth achieved by Qualtrics last year as it took advantage of SAP’s global sales channels to reach new markets.
He added he had agreed with Smith that an IPO would offer the best chances for Qualtrics to grow, explore acquisitions and attract talent.
Under the proposed initial public offering, SAP would retain a majority stake in Qualtrics and Smith would be the second-largest shareholder.
A final decision on the IPO and its conditions and timing is pending and subject to market conditions, SAP said.
SAP said that as it would remain majority shareholder, it would continue to consolidate Qualtrics’ results. The transaction is thus not expected to have an impact on SAP’s 2020 or longer-term financial targets.
SAP publishes second-quarter results on Monday.