SAP’s Qualtrics Boosts Deal Size to Seek $1.5 Billion in IPO

Qualtrics International Inc. logo on a smartphone arranged in the Brooklyn borough of New York, U.S., on Monday, Jan. 4, 2021. A booming market for U.S. initial public offerings shows no sign of slowing in 2021. Qualtrics International Inc., which is being spun out from SAP SE, could be one of the first listings of 2021 after it filed on December 28 for a U.S. IPO. Photographer: Gabby Jones/Bloomberg

(Bloomberg) -- Qualtrics International Inc., the customer-survey software business being spun off by SAP SE, seeks to raise as much as $1.46 billion in an initial public offering after boosting the price range.

The company plans to sell 50.4 million shares at $27 to $29 apiece, it said in an amended filing with the U.S. Securities and Exchange Commission on Monday. It had previously filed to sell 49.2 million at $22 to $26 each, which was already higher than its initial range of $20 to $24.

Qualtrics would have a market capitalization of $14.6 billion at the top end of the new range, based on its number of outstanding shares.

The red-hot IPO market has investors wanting more. U.S. IPOs from the past year, excluding special purpose acquisition companies and trusts, have traded up over 93% on a weighted-average basis, according to data compiled by Bloomberg. Technology listings like Snowflake Inc. and Unity Software Inc. have outperformed the broader market, the data shows.

Qualtrics’s return to the public market marks a shift in SAP’s strategy under Chief Executive Officer Christian Klein, who was appointed in April.

Qualtrics’s IPO will be used to repay $1.76 billion of debt owned to SAP America while the remainder will be for working capital and other general corporate purposes, according to the filing. SAP will remain Qualtrics’ controlling shareholder after the listing.

Silver Lake and its affiliates have also agreed to purchase $550 million of Qualtrics’s shares in a private placement.

In December, Qualtrics co-founder Ryan Smith bought 6 million shares at $20 a share in a private placement. Even if the offering is priced at the bottom end of $27, Smith’s one month investment would have generated $42 million in on-paper gains. Smith agreed to buy the Utah Jazz last year.

Morgan Stanley and JPMorgan Chase & Co. are leading the offering. Qualtrics is expected to begin trading on the Nasdaq Global Select Market Thursday under the symbol XM.