Dec, 2nd 2020 – Cloud computing giant Salesforce has agreed to buy a workplace messaging app Slack Technologies Inc in a sh3 trillion deal ($27.7 billion). This will mark one of the biggest purchase ever by cloud computing pioneer as it bets on extending the run for remote working and sharpen its rivalry with Microsoft.
This deal will enable Salesforce to provide a unified platform with the aim of businesses connecting to their employees, partners and customers with each other and the app they use.
According to the press release, Salesforce is paying $27.7 billion for Slack. The announcement by Slack and Salesforce read, “Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce’s common stock on November 30, 2020.”
During this pandemic, the company has been struggling to fully capitalize on the switch to remote working. Slack had changed its workplace communications by focusing on real time messaging that could be broken into conversations with groups assembled on the fly, a more faster platform than the email.
Salesforce CEO Marc Benioff said that the two companies will shape the future of enterprise software. He said, “Stewart and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it, 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.”
Slack CEO Stewart 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.”
He adds, “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, and I can’t wait to get going.”
DA Davidson analyst Rishi Jaluria said that, “The deal allows Salesforce to get deeper into collaboration and business communication and it’s good for Slack, especially to grow their penetration into non-tech companies.”
Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each slack share.
Salesforce also said that Chief Financial Officer Mark Hawkins would retire in January and will be replaced by Chief legal Officer Amy Weaver.