High Interest Leads to Higher Prices
The startup was created as a spin-off by German tech titan SAP SE, which previously purchased the company for $8 billion. The tech business plans to sell 50.4 million shares at a price between $27 to $29 per share, which is higher than the previously-announced sale of 49.2 million shares at $22 to $26 per share. Morgan Stanley and JP Morgan Chase & Co. are leading the offering.
This marks the second revision as the original plan of the company was to price its shares in a range of $20 to $24 per share. If the business managed to sell all outstanding shares at the top of the range, it would translate into a market capitalization of $14.60 billion, while the company would receive 10% of this amount.
According to Bloomberg, the raised funds will be used to pay a portion of $1.76 billion of debt owed to SAP America. The German business will remain in control of the company after the IPO is concluded.
Global private equity firm Silver Lake has reportedly agreed to buy $550 million of the company’s shares in a private placement. Just two months ago, a co-founder of Qualtrics business Ryan Smith bought 6 million shares at $20 a share in a private placement. If the selling price is $29 per share during the IPO, Smith is set to gain $54 million in on-paper gains.
SAP initially announced plans for its startup business unit to go public in July last year.
“We decided that an IPO would provide the greatest opportunity for Qualtrics to grow the experience management category, serve its customers, explore its own acquisition strategy and continue building the best talent,” SAP CEO Christian Klein said in a statement.
“SAP will remain Qualtrics’ largest and most important go-to-market and research and development (R&D) partner while giving Qualtrics greater independence to broaden its base by partnering and building out the entire experience management ecosystem.”
Shares of SAP SE are trading over 3% higher in Germany today.
SAP-owned startup Qualtrics, which is set to debut on Nasdaq on Thursday, has increased its IPO pricing as it seeks to raise $1.46 billion.
About the Author
Avi Ben Ezra is the Chief Technology Officer (CTO) and Cofounder of SnatchBot and SnatchApp (Snatch Group Limited). He leads the Group’s long-term technology vision and is responsible for running all facets of the tech business which includes being the architect of the platforms and UI interfaces.