Protect and serve

2 December 2020 By Robert Cyran Follow @rob_cyran

Mergers are often about cost cuts, but the impetus behind Marc Benioff’s $28 bln bid for Slack is so Salesforce can boost tech offerings. Microsoft is using messaging services to grow. This deal makes sense if Salesforce can increase revenue 13% – or prevent it from evaporating.

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Salesforce.com said on Dec. 1 it had agreed to buy Slack Technologies in a deal with an enterprise value of $27.7 billion. Slack shareholders will receive $26.79 in cash and 0.0776 of a Salesforce share for each share they own, or $45.52 per share based on Salesforce’s closing price on Dec. 1. That’s a 54% premium based on the company’s undisturbed price on Nov. 24. Slack will become an operating unit of Salesforce and will continue to be led by Chief Executive Stewart Butterfield.

Salesforce also said third-quarter revenue was $5.4 billion, an increase of 20% compared to the same period last year. That exceeded analysts’ expectations for quarterly revenue by 3%, according to Refinitiv.

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