Salesforce CEO Marc Benioff has been on an acquisition spree in recent years, buying Tableau and MuleSoft.
Salesforce is making the biggest acquisition in its 21-year history. The company announced on Tuesday that it’s buying chat software developer Slack for over $27 billion. Through a combination of cash and stock, Salesforce is purchasing Slack for $26.79 a share and.0776 shares of Salesforce, according to a statement. That comes to about $45.86 a share. Prior to initial reports of a deal last week, which led to a 38% pop in Slack’s shares, the stock was trading at under $30. The purchase marks one of the largest ever for the software industry. The biggest was IBM’s $34 billion purchase of Red Hat in 2018, followed by Microsoft’s $27 billion acquisition of LinkedIn in 2016. Last year, the London Stock Exchange agreed to buy data provider Refinitiv for $27 billion, though the deal has yet to be cleared by European regulators. For Salesforce, the Slack deal is the latest in CEO Marc Benioff’s multiyear acquisition spree. The company spent $15.3 billion on data visualization company Tableau in 2019 and, a year earlier, shelled out $6.5 billion to acquire MuleSoft, whose back-end software connects data stored in disparate places. Salesforce said the Slack purchase comes to an enterprise value of $27.7 billion, which takes into account shares outstanding along with debt and cash. The deal values Slack at over 24 times estimated revenue for next year. Salesforce, which got its start by developing cloud-based software for sales reps, has dramatically expanded its reach in recent years and, along the way, become one of the most valuable software companies in the world, passing Oracle, SAP and IBM as well as other legacy tech companies such as Cisco and Intel. By acquiring Slack, a business chat service with over 130,000 paid customers, Salesforce is bolstering its portfolio of enterprise applications and filling out its broader software suite as it seeks new areas of growth.
