Salesforce, the cloud-based sales-management software as a service (SaaS) company, has agreed a deal to acquire professional messaging app Slack from $27.7 billion. It will be the single biggest acquisition in the history of Salesforce, and one it sees as key to its hopes of challenging the larger Microsoft in their battle for share of the productivity software market.
A Covid-19 vaccine may be on the horizon to promise a return to normality at some point in 2021, but many of the biggest companies in the world are betting on some 2020 pandemic habits remaining. At least in part. One of those is the work from home trend and companies in the professional digital communication and productivity tools sector are clearly tooling up.
Commenting on the deal, Salesforce chairman and chief executive Marc Benioff called the tie-up between his company and Slack “a match made in heaven”. He went on to say?
“Together, Salesforce and Slack will shape the future of enterprise software and will transform the way everyone works in the all-digital, work-from-anywhere world.”
The deal that has been agreed will see Slack shareholders receive $26.79 in cash, plus 0.0776 Salesforce shares for each Slack share they own. In total, the cash and shares offer adds up to a valuation of $45.5-a-share and represents a 54% premium on Slack’s closing share price ahead of news on talks between the two companies breaking last week.
Yesterday’s confirmation of a deal being struck saw Slack shares slide by 0.3%, valuing the company at $25 billion. Salesforce’s share price was down 4.2%. It has a total market capitalisation of $220 billion.
A tie-up with Salesforce will have made more sense to the board and investors of Slack as a result of the application’s failure to do as well as it might have during the pandemic-induced remote work boom of 2020. While competitors like Microsoft Teams and Zoom have seen user numbers soared, Slack has struggled to keep pace with the competition.
Founded in 2013 as a spin-off project from an unsuccessful computer game-design project, Slack is positioned as a collaboration-friendly alternative to email and basic messenger apps such as Skype. It’s popular with professionals who wish to chat, collaborate and share files in one digital space. Slack’s chief technology officer is UK-born Cal Henderson, who is originally from Cambridge.
Salesforce, on the other hand, has seen revenues boom over 2020. The company yesterday reported a 20% uptick in year-on-year third quarter revenue, bringing in a total of $5.42 billion. Salesforce’s core product is a customisable cloud-based customer relationship management platform, and outbound sales and marketing tool. The company was founded in San Francisco in 1999.