Artificial intelligence-powered customer survey software maker Qualtrics has agreed to buy healthcare market research company Press Ganey Forsta in a $6.75 billion deal, according to a Financial Times report. If finalized, the deal would give Qualtrics access to the healthcare survey firm’s deep hospital ties and datasets, which it would use to help healthcare providers to improve tracking patient satisfaction and offer better care.
According to the terms of the deal — which is to be announced later on Monday — Press Ganey will be paid in a combination of cash and privately held Qualtrics’ stock. A consortium of 11 banks and private capital firms in total are reportedly providing the debt financing for the deal
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Qualtrics, a U.S. based company, is owned by private equity firm Silver Lake. It provides tools for measuring and analyzing customer, employee, product and brand experiences. It serves large enterprises, governments and universities with clients, and its clients include Microsoft, BMW, and the U.S. Department of Homeland Security.
German software company SAP, which bought Qualtrics in 2018 for $8 billion, sold its majority stake to private investment firms Silver Lake and the Canada Pension Plan Investment Board in a deal valued at about $12.5 billion in 2023.
Press Ganey, on the other hand, is used by over 41,000 hospital systems and healthcare companies to compile feedback from patients and doctors in manual, verbal and digital surveys. The companies are betting the combination of Qualtrics’ artificial intelligence technologies with Press Ganey’s reach in the healthcare industry will give rise to new AI-powered tools and services, according to The Financial Times.
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According to industry experts, “vertical” technology companies like Press Ganey will become increasingly valuable as acquisition targets for AI platforms because of their access to data that can be used to train algorithms.
The deal, which values Press Ganey at an enterprise value of $6.75 billion, is Qualtrics’ largest acquisition till date. Silver Lake and Canada Pension Plan Investment Board teamed up in 2023 to take Qualtrics private in a $12.5 billion buyout.
This deal is the latest in a large stretch of private equity-backed software and health-tech deals.
The value of private equity-backed software and health-tech deals globally was $571 billion worldwide this year to the end of September, the third highest on record, according to data from the London Stock Exchange Group, FT reported.