Salesforce Agrees to Buy Slack for $27.7 Billion
Salesforce.com Inc. agreed to buy Slack Technologies Inc. for $27.7 billion in cash and stock, giving the corporate software giant a popular workplace-communications platform in one of the biggest technology deals of the year. The transaction, Salesforce’s largest-ever acquisition, is expected to close by the end of July, the San Francisco-based company said Tuesday in a statement. Slack investors will receive $26.78 for each company share as well as 0.0776 shares of Salesforce—representing a 55% premium to Slack’s price on Nov. 24, the day before reports about deal talks between the companies.
Salesforce Chief Executive Officer Marc Benioff has orchestrated more than 60 acquisitions in 21 years, taking his company from dot-com era upstart to a titan of cloud computing. The Slack deal would give Salesforce, the leader in programs for managing customer relationships, another angle of attack against Microsoft Corp., which has itself become a major force in internet-based computing. Microsoft’s Teams product, which offers a workplace chatroom, automation tools, and videoconference hosting, is a top rival to Slack.
“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 the statement.
Mr. Benioff, was effusive about the combination, calling it “a match made in heaven.” In a conference call, he said that Stewart Butterfield, Slack’s chief executive, and Bret Taylor, Salesforce’s president, had presented him with the deal.
Slack’s trajectory reminded him of Salesforce’s, Mr. Benioff said, and he marveled at the possibilities of combining the two companies’ data and tools. “My eyes lit up,” he said. “This is our ultimate vision.”
Mr. Taylor said the pandemic had fundamentally shifted consumer behavior and the way people work. Buying Slack would help Salesforce’s customers make the digital transformation, he said. Roughly 90 percent of Slack’s enterprise customers also use Salesforce.
Mr. Butterfield will continue leading Slack, which will become an operating unit of Salesforce.
Slack, which was founded in 2010 by Mr. Butterfield, grew quickly and previously attracted — and rejected — takeover offers from the likes of Google, Microsoft, and Amazon. Its valuation was about $19.5 billion when it went public last year, but its shares later sank.
Demand for Slack’s products, which allow people to communicate and collaborate with one another, has increased as people work from home during the pandemic. While the company said in September that revenue rose 49 percent to $216 million in the three months ending in July and that the pandemic had created a “significant increase in demand and usage of Slack,” it also said it did not expect that rise to continue. Layoffs at some of its customers have hurt its business, the company said.
On Tuesday, Slack reported that revenue grew 39 percent in the three months ending with October.
Other firms focused on workplace collaboration products, including Airtable, Asana, Box, DocuSign, Dropbox, and Smartsheet, may also be potential targets as highly valued software companies look to roll up the fragmented market for collaboration tools.
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