Salesforce is buying Slack for $28bn, its biggest acquisition yet
Salesforce.com Inc is buying workplace messaging app Slack Technologies Inc for a whopping $27.7 billion, making this acquisition its biggest ever. The transaction is expected to close by end of July 2021. For Slack, this deal would become a life-saver as it faces immense competition from Microsoft Teams and Google Chat in the post-coronavirus age, wherein remote working has become the norm.
Evidently pleased with the deal, Salesforce CEO Marc Benioff said it's 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," he added. He also heaped praises on Slack CEO Stewart Butterfield, saying his team created one of the most beloved platforms in enterprise software history.
Meanwhile, Butterfield said both companies see a huge opportunity together. "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," he said. He also called the deal the "most strategic combination in the history of software". "I can't wait to get going," added the 47-year-old.
The announcement post divulged details on what lies ahead for both companies. "As the new interface for Salesforce Customer 360, Slack will transform how people communicate, collaborate and take action on customer information across Salesforce as well as information from all of their other business apps and systems to be more productive, make smarter, faster decisions and create connected customer experiences," the post read.
To note, Slack went public in 2019, but months later, it lost nearly 40% of its value. Its net losses in the first two quarters of 2020, ending July 31, were pegged at $147.6 million by TechCrunch. In fact, Slack was valued at a little over $25 billion, which makes this deal a winner for the company.
Separately, this acquisition puts Salesforce at par with its rival Microsoft. Benioff oversaw a record 60 acquisitions in 21 years, taking his company to newer heights. He has also set an ambitious annual revenue goal of $35 billion for his company by fiscal 2024. Since going public in 2004, Salesforce looks at generating year-over-year revenue increases of over 25%, said reports.
Last year, Salesforce bought analytics firm Tableau Software Inc for $15.3 billion, in an all-stock deal, which was its biggest acquisition at the time. In 2018, Benioff acquired MuleSoft Inc. for $6.5 billion. In 2016, Salesforce purchased Quip for $750 million. As per reports, Salesforce shares dipped about 4% after closing at $241.35. Slack's shares weren't affected much and remained at $43.84 after closing.