Frankfurt (Reuters) - Around four years after the takeover, SAP is selling its data analysis subsidiary Qualtrics.

The financial investor Silver Lake, together with the Canadian pension fund CPP Investments, is paying 7.7 billion dollars for the 71 percent stake, Europe's largest software company announced on Monday. SAP bought Qualtrics in 2019 for eight billion dollars from company founder Ryan Smith.

Silver Lake has the necessary know-how and experience to expand Qualtrics' business, said SAP CEO Christian Klein. "SAP intends to remain a close market and technology partner, serve joint customers and continue to contribute to Qualtrics' success." The transaction is subject to the usual regulatory approvals and is expected to be completed in the second half of 2023.

The financial investor Silver Lake, which according to the data provider Refinitiv already holds almost 14 percent of Qualtrics and has stakes in numerous other technology companies, is offering 18.15 dollars per share and wants to delist the company from the stock exchange. This is an increase of almost 50 percent compared to the end of January. At that time, SAP had announced the sale of its stake at the same time as announcing its financial figures and job cuts. Klein explained the timing with the fact that the integration of the data analysis specialist's software with SAP products had not been completed beforehand.

Analyst Nay Soe Naing from Berenberg Bank viewed the deal positively because the growth targets for Qualtrics' cloud business are lower than the comparable forecasts for SAP. In addition, the operating profit margin of the Walldorf-based software group would improve by around one percentage point without Qualtrics. According to his colleague Armin Kremser from DZ Bank, SAP will probably use the proceeds for acquisitions and a share buyback. SAP shares nevertheless fell 2.3 percent on Monday. Qualtrics shares, on the other hand, rose by 6.5 percent to 17.63 dollars in pre-market US trading.

The relationship between the two companies has been characterized by financial ups and downs. Qualtrics was valued at 15 billion dollars when it went public in 2021. At that time, SAP received just under 1.8 billion dollars from the issue. The market capitalization then rose to 34 billion dollars before shrinking to around seven billion dollars by the end of January in the wake of the slump in technology stocks. Based on the Silver Lake offer, Qualtrics is currently valued at 12.5 billion dollars including debt. This is the largest corporate takeover by a financial investor since the beginning of the year.

Qualtrics' programs enable companies and public authorities to collect feedback and data from customers and employees in order to analyze and process it in real time. Last year, the company increased its turnover by 36 percent to 1.46 billion dollars. At 1.05 billion dollars, the operating loss was at the same level as in 2021. For 2023, Qualtrics forecast revenue of between 1.661 and 1.669 billion dollars and a positive operating margin of ten to eleven percent.

(Report by Hakan Ersen, edited by Ralf Banser. If you have any queries, please contact the editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)