SAP is buying Utah-based startup Qualtrics for $8 billion — days before it's scheduled to IPO (SAP)

Qualtrics CEO Ryan Smith

SAP has announced its intent to buy Qualtrics for $8 billion.
Qualtrics is a Utah-based startup that helps companies gather feedback and refine their products.
Qualtrics, which was last valued at $2.5 billion, was just days away from its IPO.
That IPO could have valued the company at $5 billion or more, right out of the gate.

SAP, the German database giant, has announced an $8 billion all-cash deal to acquire Utah-based Qualtrics, a startup last privately valued at $2.5 billion.

Notably, Qualtrics was scheduled to hold its IPO this week — an offering that could have valued the company at more than $5 billion right out of the gate, according to the company's most recent filings. The deal is expected to close in the first half of 2019.

Qualtrics specializes in what it calls experience management, or XM, providing tools to help companies gather feedback and optimize their products.

After the close of the deal, Qualtrics will maintain its existing headquarters in Seattle, Washington, and Provo, Utah. Qualtrics CEO Ryan Smith will continue in his role, as well.

Qualtrics is something of an anomaly in the world of high-flying tech startups: Founded in 2002 by Smith and his father — a professor of marketing at Brigham Young University — the company didn't accept any venture funding until it had been in business for a decade. Qualtrics had raised $400 million in total venture capital funding from investors including Accel and Sequoia Capital.

Over the years, the younger Smith has earned a reputation for an eccentric brand of generosity. At one point, Qualtrics paid to sponsor the Utah Jazz, its local NBA team, and had them wear a patch promoting its "5 for the Fight" cancer research charity. At another point, the company loaned a customer a Tesla Model X.

This deal comes shortly after IBM announced its intent to purchase open source software provider Red Hat for $34 billion. Microsoft, too, just closed its $7.5 billion acquisition of code sharing service GitHub, making this a banner year for M&A action in the business-to-business tech sector.

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