SAP snaps up survey software firm Qualtrics in $8bn deal

America’s Qualtrics International has abandoned plans to go public after agreeing a $8bn takeover deal with German enterprise software giant SAP.

Utah-based Qualtrics, which specialises in the burgeoning field of experience management, had filed for an initial public offering and was understood to be on an investor roadshow. But on Monday SAP confirmed it would buy Qualtrics, part of a strategy to shift its focus away from on-premises services to the cloud.

The deal follows a similar move by IBM, which earlier in November announced it was paying $34bn for open-source software specialist Red Hat.

Chief executive Bill McDermott said: “We continually seek out transformation opportunities [and] today’s announced is exactly that. The combination of Qualtrics and SAP reaffirms experience management as the ground-breaking new frontier for the technology industry.”

The all-cash offer is expected to close in the first half of 2019. It has been approved by both company’s boards and by Qualtrics shareholders, which include co-founder and chief executive Ryan Smith, 40. Smith and his brother Jared, 43, launched the business – which develops and sells market research and survey software – in their parent’s basement in 2002. Their father Scott is also a shareholder.

Chief executive Smith, who will remain with the company after the sale, said the deal would help Qualtrics “scale faster” and called it a “once-in-a-generation opportunity to power the experience economy”.

Shares in SAP, Germany’s biggest company by market value, were down 4% at €91.5 by 1pm GMT.