Qualtrics to Acquire Press Ganey Forsta for $6.75 Billion: A Strategic Move in AI-Powered Healthcare Technology

Software company Qualtrics to buy health-tech firm Press Ganey for $6.7bn

Qualtrics, the customer service software company owned by private equity group Silver Lake, has struck a deal to buy healthcare-focused technology firm Press Ganey Forsta for $6.75bn including debt, according to people familiar with the matter. The deal, which is set to be announced on Monday, will help to extend Qualtrics' artificial intelligence technologies to healthcare clients as it attempts to apply AI to complex, highly regulated industries. Qualtrics provides everything from automated chat widgets to tools that sift customer feedback to more than 20,000 companies and organisations globally, including Delta Air Lines and Hilton Worldwide. Press Ganey, meanwhile, 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 that 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, said people familiar with the matter. Industry experts have predicted that so-called "vertical" technology companies such as Press Ganey will become increasingly valuable as acquisition targets for AI platforms, given their access to sets of data to train learning algorithms. Press Ganey's combination with Qualtrics, a pioneer in applying AI to handle customer services like ordering food online, or rebooking flights and hotel stays, is also meant to bolster its technology offerings as large tech giants such as Palantir and Oracle expand into healthcare, said a person briefed on the matter. Under the terms of the deal, Press Ganey's owners -- Ares Management and Los Angeles-based private equity group Leonard Green & Partners -- 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 providing the debt financing for the deal, the sources said. The takeover is the latest acquisition in a busy stretch for private equity-backed software and health-tech deals, a bright spot in a market where many sponsors have been slow to exit investments for fear of poor returns. The value private equity-backed software and health-tech deals globally was $571bn worldwide this year to the end of September, the third highest on record, according to data from the London Stock Exchange Group. The deal, which values Press Ganey at an enterprise value of $6.75bn, marks Qualtrics' biggest acquisition in its two-decade history. Silver Lake and Canada Pension Plan Investment Board teamed up in 2023 to take Qualtrics private in a $12.5bn buyout. Qualtrics under chief executive Zig Serafin has turned profitable, generating over $500mn in free cash flow over the past 12 months, the people said. Silver Lake -- which last week agreed to take video games maker Electronic Arts private in the largest leveraged buyout of all time, valued at $55bn -- is known as one of the leading private equity investors in technology companies. It often uses its largest investments like Dell and entertainment company Endeavor as a beachhead for industry consolidation.

Qualtrics to acquire Press Ganey Forsta in $6.75bn deal

The acquisition will enable Qualtrics to expand its AI capabilities in a space that is increasingly adopting advanced methods and technologies. Cloud-based software company Qualtrics has signed a deal to invest $6.75bn into the acquisition of experience and analytics platform Press Ganey Forsta. The deal will enable Qualtrics to combine its technologies with Press Ganey Forsta's data capabilities and healthcare knowledge, in order to create a 'complete' AI platform, for the patients, consumers, employees and market research. Currently, Press Ganey Forsta services 43,000 people worldwide, across the healthcare, financial, hospitality, market research, professional services, retail and technology industries. Under the terms of the agreement, the $6.75bn deal will be paid via a combination of cash and equity, with the transaction expected to close, pending regulatory approvals and closing conditions, in the coming months. Until then, both organisations will continue to operate independently. Commenting on the news, Zig Serafin, the CEO of Qualtrics said, "Bringing Qualtrics and Press Ganey Forsta together will accelerate the adoption of AI and create the most comprehensive platform for improving the human experience. Combining Qualtrics' AI platform with Press Ganey Forsta's trusted analytics and deep expertise creates an opportunity to deliver exceptional value and measurable outcomes for our customers. "There's no more important proving ground for experience management than healthcare, where better experiences for patients and employees directly impact better outcomes and quality of care. We're excited to welcome Press Ganey Forsta to Qualtrics and deliver this future together." Patrick T Ryan, the chair and CEO of Press Ganey Forsta added, "AI is rapidly transforming every industry and organisations need proven, innovative solutions grounded in deep expertise to move from insight to impact faster. This investment ignites our ability to deliver. "By bringing together two leading companies, we're accelerating critical advancements that will elevate the human experience, driving greater safety, trust, and value for millions of patients, consumers and employees worldwide. It's a remarkable opportunity and we're energised by the journey ahead." As the demand for AI technologies grows worldwide, a number of organisations are acquiring additional platforms to expand their AI capabilities. In early September, app security company F5 announced its intention to acquire Irish-led US start-up CalypsoAI for $180m. The company cited its goal of creating the "most complete solution for securing AI inference". Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.