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Why is SAP spinning Qualtrics out via an IPO?

Why is SAP spinning Qualtrics out via an IPO?

What we can learn from Qualtrics’ old valuation and new results
Over the weekend, software giant SAP https://www.qualtrics.com/news/sap-announces-intent-to-take-qualtrics-public/]announced that https://techcrunch.com/2020/07/26/sap-will-spin-out-its-8b-spin-in-qualtrics-acquisition/]it will take Qualtrics public, with the German software company retaining a majority stake in the Utah-based “experience management” firm after its forthcoming debut.
https://crunchbase.com/organization/sap]SAP https://techcrunch.com/2018/11/11/sap-agrees-to-buy-qualtrics-for-8b-in-cash-just-before-the-survey-software-companys-ipo/]paid $8 billion in cash for Qualtrics back in 2018, right before the smaller firm was set to go public. Chatting with the CEOs of both companies around the time of the deal, they were https://news.crunchbase.com/news/qualtrics-and-sap-fired-up-after-their-8b-tie-up-announced-over-weekend/]pretty pumped about the combination. Since then, SAP has https://www.cnbc.com/2019/10/11/sap-maintains-dual-ceo-tradition-as-bill-mcdermott-departs.html]swapped CEOs.
The Exchange explores startups, markets and money. You can read it https://techcrunch.com/subscribe/?tpcc=theexchange]every morning on Extra Crunch, or get https://techcrunch.com/newsletters]The Exchange newsletter every Saturday.
At the time, the deal not only made waves within the business realm, it also helped put Utah’s startup scene on the map. (An $8 billion deal makes an impact.)
Current commentary on the spin-out idea seems to rotate on the idea of unlocking value: That if https://crunchbase.com/organization/sap]SAP can float a good chunk of https://crunchbase.com/organization/qualtrics]Qualtrics’ shares, the market may give that equity a good price. Then, the value of Qualtrics that SAP will retain will gain implicit value, perhaps boosting the value of its own shares. Making the point, https://www.cnbc.com/2020/07/27/sap-says-its-qualtrics-unit-will-go-public.html]CNBC quoted analysts from Bernstein Research, which said it believes “many SAP investors do not fully understand Qualtrics,” and that the spin-out might “help at least as it relates to better understanding its value.”
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