Inking one of its biggest deals in history, Salesforce announced the acquisition of Slack for a massive $27 billion in a combination of stock and cash options. Salesforces said it will deeply integrate Slack as part of Salesforce Cloud and the Salesforce Customer 360 interface.

On Tuesday, December 1, business software giant Salesforce.com Inc (NYSE: CRM) announced the purchase of the popular workplace chat application Slack. The official announcement came soon within a week as rumors broke out in the last week of November.

This is one of the biggest acquisitions by Salesforce in history as it goes to acquire Slack Technologies Inc (NYSE: WORK) for a whopping $27 billion. The entire deal will happen through a combination of stock and cash options. Salesforce is buying Slack Technologies (NYSE: WORK) at a price of $26.5 per share and .0776 shares of Salesforce (CRM). The deal values Slack at nearly 24 times its estimated revenue for the next year.

With reports of Salesforce buying Slack, the WORK stock has appreciated 48% in the last 10 days. As of Tuesday closing, Slack (WORK) was trading at a price of $43.84 per share on NYSE. On the other hand, the CRM stock was down 4.79% in the aftermarket hours.

Salesforce has also been on an acquisition spree over the last year and so, as the company plans to put extra cash at work and expand its global footprint.

Last year in 2019, Salesforce acquired data visualization company Tableau for $15.3 billion. Just a year before that, it acquired MuleSoft for $6.5 billion. The latest Slack acquisition comes as one of the biggest-ever deals not only for Salesforce but also for the software industry. Marc Benioff, Chairman and CEO of Salesforce said:

“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.”

Salesforce Taking Up Cloud Wars with Microsoft

The cloud services market has exploded significantly over the last decade and will continue to do so ahead. Salesforce has established itself as a pioneer CRM tool allowing companies to market, sell, service, and conduct commerce worldwide.

On the other hand, Slack has established its position as the go-to workplace app for letting teams collaborate and work from anywhere in the world. Recently, Slack has been facing a lot of competition from Microsoft‘s own Teams app. A report from Morgan Stanley in October 2020 suggested that big players are dumping Slack and going for Microsoft Teams. Right after Tuesday’s deal, Wedbush Securities analyst Dan Ives said:

“For Benioff, this is all about Microsoft. It’s just clear Microsoft is moving further and further away from Salesforce when it comes to the cloud wars.”

Salesforce has said that it will deeply integrate Slack into Salesforce Cloud making it part of the Salesforce Customer 360 interface. “Slack will be able to expand its presence in the enterprise, not just among Salesforce customers, but for any company undergoing a digital transformation,” they noted.

Even post the completion of the deal, Slack will continue to function under the leadership of the currency CEO Stewart Butterfield. Speaking about the matter, Butterfield said:

“Salesforce started the cloud revolution, and two decades later, we are still tapping into all the possibilities it offers to transform the way we work. The opportunity we see together is massive. 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. Personally, I believe this is the most strategic combination in the history of software. I can’t wait to get going.”

For more news from the business world, please, follow the link.

The illustrations were provided by Depositphotos.com

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *