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Slack increases in acquisitions news, Salesforce falls
On Tuesday, November 1, software heavyweight Salesforce (CRM) revealed that it had signed a definitive agreement to acquire business communications company Slack (WORK).
Salesforce started the cloud revolution, and two decades later, we continue to leverage all the power it offers to transform the way we work. The opportunity we see together is enormous, ”Slack CEO Stewart Butterfield said of the acquisition.
This occurs only one week after the Wall street journal reported that Salesforce had been in talks to acquire the business communications company. For Slack investors, this was framed as a decisive victory: Investors rose 37% in stocks on the day the news broke, and stock prices have continued to trend higher since then, now 46%. more in the last five sessions.
Slack last traded at $ 43.84 per share, giving it an implied market capitalization of around $ 25 billion.
Salesforce investors have responded less optimistically to news of the Slack acquisition, with stocks falling 7% in the past five sessions. Shares continued to fall outside of business hours Tuesday as Salesforce confirmed the acquisition and released its third-quarter results to the market.
The deal at a glance
Under the final agreement, Salesforce will acquire Slack in a cash-plus-share deal: For every Slack share they own, Slack investors will receive $ 26.79 in cash and 0.0776 Salesforce shares, valuing Slack at about $ 28 billion. of dollars.
Before last week’s Wall Street Journal report, the company had an enterprise value of about $ 17 billion, according to MarketWatch.
Salesforce said it would use a combination of existing cash reserves and new debt funds to facilitate the acquisition.
In analyzing the practical implications and synergies of the acquisition, Salesforce said that:
‘Slack will be deeply integrated into every Salesforce Cloud. As the new interface for Salesforce Customer 360, Slack will transform the way people communicate, collaborate and take action on customer information in Salesforce. ‘
On top of that, it appears that there will be a greater strategic focus on enterprise customers, noting that Slack will be well positioned to expand its customer base not only among Salesforce customers, but also “any business that is undergoing a digital transformation. “.
‘It’s a match made in heaven. Together, Salesforce and Slack will shape the future of business software and transform the way everyone works in the fully digital world, where you work from anywhere, ”said Salesforce CEO Marc Benioff.
The acquisition still requires Slack shareholder approval.
Barring that or any other regulatory issue, the deal is expected to close in the second quarter of Salesforce’s fiscal year 2022.
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