[adventured]

$7 billion cash-out for the family that controls Qualtrics, perhaps an irresistible opportunity.

It's 30x $266m in profit. They might need to get to $3b or $4b in sales to reach that kind of annual profit generation, if they spend like most SaaS companies do to pursue growth. They might have seen blips over the next five or six years where their valuation ran higher than $8b without the fundamentals to support it (assuming everything went according to plan in the business), however, averaged over time I find it hard to believe they could support an $8b market cap without a dramatic size increase. This party market won't last forever. Excellent sale by the owners (all cash at that, avoiding the downside risk in SAP's stock at 32x earnings; in any other market SAP gets a 20 PE or lower).

I also suspect that as a public company, assuming the time it takes to scale to justify an $8b-$10b style market cap (five or six years at least, likely more), and the dilution they'd suffer as a family when it comes to employee stock compensation over time, they might need something more like a $12b+ stable future outcome to match where they're already at with SAP. Introduce business risk, economic risk, stock market risk, and a lot of years to get from here to there - the $7b would seem to make great sense for the Smith family. The best reason to not take this deal, is to keep control of the company - as it is, the Smiths get to keep running it anyway post acquisition and don't have to deal with public shareholders et al.