SAP is acquiring SurveyMonkey rival Qualtrics for $8 billion in cash. The move comes as Qualtrics was ramping up for an IPO (initial public offering).

Qualtrics revenues were $184.2 million in the first six months of 2018, and the company had a $3.4 million net loss during that period, according to a statement from the company earlier this month. Moreover,

Qualtrics was on track to generate about $400 million in annual revenue for 2018, and the company projects a forward growth rate of more than 40 percent annually. That means SAP is valuing the company at a frothy 20 times annual revenues in terms of 2018 revenues.

What Does Qualtrics Software Do?

The Qualtrics software portfolio has Customer Experience, Employee Experience, Brand Experience and Product Experience measurement capabilities.

The combination of Qualtrics' experience data and SAP's operational data will "enable customers to better manage supply chains, networks, employees and core processes. Together, SAP and Qualtrics will deliver a unique end-to-end experience and operational management system to power organizations," the companies said.

Qualtrics' performance, even before the M&A deal was announced, was pressuring SurveyMonkey based on head-to-head competitive growth rates.