SAP (NYSE: SAP) is acquiring Qualtrics for $8 billion, snapping up the survey software company just before its planned IPO.
The all-cash deal has been approved by the boards of both companies and by Qualtrics shareholders.
Qualtrics competes with SurveyMonkey, which went public in September. Qualtrics claims to be bigger and growing faster than SurveyMonkey and also more profitable.
SAP has been counting on new cloud products for growth as the transition away from traditional desktop software has taken business from its core enterprise resource planning business.
In October, the German software company raised its outlook following a 41% jump in third-quarter cloud revenue. SAP said it now expects revenue growth of 7.5% to 8.5% this year, up from the prior range of 6% to 7.5%.
The deal is SAP's second-biggest acquisition ever, following the $8.3-billion purchase of travel and expense software company Concur in 2014.
To build its cloud business, SAP acquired SuccessFactors in 2011 for $3.4 billion, and in 2018, purchased Callidus for sales performance management for $2.4 billion.
Qualtrics is the latest software company to get acquired just before its planned IPO. Cisco bought AppDynamics in 2017 right before its debut, and Workday bought Adaptive Insights earlier this year prior to an IPO.
Qualtrics gets most of its sales from subscriptions and also generates revenue from a research on demand option that existing customers can use to get feedback from "a curated group of respondents," and from professional services.
SAP shares dived $5.42, or 5%, to $102.89, soon after Monday’s open
