Salesforce To Acquire Slack

  1. Slack Bought By Salesforce
  2. Salesforce And Slack Merger
  3. Salesforce To Acquire Slack For $27.7b
  4. Slack Sale
© Stephen Lam/Getty Images The Salesforce logo is seen at its headquarters on Dec. 1, 2020 in San Francisco.

Cloud computing giant Salesforce said it will acquire workplace messaging service Slack in a deal valued at $27.7 billion.

(Reuters) - Salesforce.com Inc has agreed to buy workplace messaging app Slack Technologies Inc in a $27.7 billion deal, the biggest by the cloud-computing pioneer as it bets on an extended run for. Salesforce on Tuesday said it would acquire Slack for $27.7 billion in cash and stock. The messaging platform will be 'deeply integrated into every Salesforce Cloud,' the companies wrote in a.

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Salesforce announced the deal on Tuesday, saying that under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share. The deal is subject to shareholder approval and expected to close in the second quarter of Salesforce's fiscal year 2022.

Salesforce shares slipped Wednesday, falling 10% in early trading as Slack slipped by about 3%.

The move comes as the pandemic has accelerated demand for remote work and workplace management software, and signals that some believe that workforce shifts could become permanent.

MORE: Salesforce announces layoffs after quarterly revenue tops $5 billion

Salesforce CEO Marc Benioff called it a 'match made in heaven.'

'Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world,' Benioff said in a statement.

© Stephen Lam/Getty Images The Salesforce logo is seen at its headquarters on Dec. 1, 2020 in San Francisco.

Slack CEO Stewart Butterfield added that 'the opportunity we see together is massive,' calling the deal 'the most strategic combination in the history of software.'

'As software plays a more and more critical role in the performance of every organization, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organizational agility,' Butterfield said.

Saleforce said Slack will be 'deeply integrated into every Salesforce Cloud' and become the new interface for Salesforce Customer 360. When combined, Salesforce and Slack will 'create the most extensive open ecosystem of apps and workflows for business and empower millions of developers to build the next generation of apps, with clicks not code,' according to the companies.

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Tech industry analysts speculate the deal is partly a way for Salesforce to compete with fellow cloud computing giant Microsoft, which owns its own suite of Teams workplace messaging software. Dan Ives, managing director of equity research at Wedbush Securities, said in a memo that keeping pace with Microsoft was the 'core reason for this deal.'

Slack

Ives also noted that with more people working from home 'messaging platforms such as Zoom, Slack, and Teams have revolutionized the way that enterprises view collaboration software going forward.'

Even after a vaccine is readily available and employees begin returning to the office in 2021, Ives noted, this type of software will only become 'further embedded in enterprise initiatives.'

Enterprise software giant Salesforce.com (CRM) reported stronger-than-expected third-quarter earnings results on Tuesday and announced that it has signed a definitive agreement to acquire popular messaging software platform Slack Technologies (WORK).

Salesforce will acquire Slack for $27.7 billion ($26.79 in cash and 0.0776 shares), making it the largest ever acquisition for the cloud software giant.

© Provided by Yahoo! Finance Salesforce.com CEO Marc Benioff delivers his keynote address at the company's annual Dreamforce event in San Francisco, California November 19, 2013. REUTERS/Robert Galbraith (UNITED STATES - Tags: SCIENCE TECHNOLOGY BUSINESS)

Salesforce said the deal will be “transformative for customers and the industry” and it will “create the operating system for the new way to work, uniquely enabling companies to grow and succeed in the all-digital world.”

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“[Slack CEO] Stewart [Butterfield] and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it,” Salesforce CEO Marc Benioff said in the release.

“This is a match made in heaven. Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world. I’m thrilled to welcome Slack to the Salesforce Ohana once the transaction closes,” Benioff added.

Salesforce said Slack will become the new interface for Salesforce Customer 360 and it will be “deeply integrated into every Salesforce Cloud.”

According to Salesforce, Slack will “transform how people communicate, collaborate and take action on customer information across Salesforce as well as information from all of their other business apps and systems to are more productive, make smarter, faster decisions and create connected customer experiences.”

Slack Bought By Salesforce

Slack also plans to expand its footprint through Salesforce, including its customers and other companies going through a digital transformation.

Slack will continue to be led by Butterfield.

[Read more: Why Salesforce buying Slack for $27.7 billion isn't a shock]

Salesforce And Slack Merger

Record Q3 results

For the third quarter, Salesforce reported revenue of $5.42 billion, up 20% year-over-year, beating analysts’ forecasts of $5.25 billion. The SaaS giant reported earnings per share of $1.74, topping forecasts for 75 cents. This is the second consecutive quarter of revenue above $5 billion.

Why did salesforce buy slack

Benioff started Salesforce in 1999, and since that time it’s become one of the fastest-growing enterprise software companies in the world with a market cap greater than $219 billion. By 2018, Salesforce was doing $10 billion-plus in annual revenues.

Salesforce raised its fiscal 2021 revenue guidance to $21.11 billion. It initiated its fiscal 2022 guidance, forecasting it to be between $25.45 billion and $25.55 billion, up 21% year over year, with approximately $600 million related to the Slack acquisition.

“No other major enterprise software company is growing at this rate. We’re rapidly moving to an all-digital world, where work happens wherever people are. Our results are being driven by the success of our customers and the relevance of our Customer 360 Platform in this new normal,” Benioff said in the earnings release.

The Slack deal is the latest in a slew of big acquisitions for Salesforce. In June 2019, Salesforce acquired Tableau Software, an analytics and data visualization company, in an all-stock deal for $15.7 billion. A year before that deal, Salesforce acquired Mulesoft, a company that creates application programming interfaces (APIs) to connect different systems, for $6.5 billion.

Other deals include Salesforce’s acquisition of ExactTarget in 2013 and its 2016 acquisition of cloud-based e-commerce services provider Demandware.

Slack

Salesforce has looked at other big acquisitions in recent years that didn’t transpire. In 2016, Microsoft edged out Salesforce to acquire LinkedIn in a $26.2 billion deal. That year, Salesforce also considered acquiring Twitter. In his book “Trailblazer,” Benioff wrote that in 2016 he was convinced Salesforce should make a bid for Twitter on the view that the social platform could offer the company’s customers a “treasure trove of data.”

Slack went public via a direct listing in June 2019. Shares of Slack have leaped nearly 48% in the last five days.

Salesforce’s shares fell 3.36% to last trade near $233.83 in the after-hours session. Shares of Salesforce have surged more nearly 50% year-to-date, outpacing the broader market.

Salesforce To Acquire Slack For $27.7b

Ian bremmer twitter. Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.

Slack Sale

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