December 2, San Francisco: Business enterprise software giant Salesforce stock is all set to acquire workplace communications app Slack for a whopping $27.7 billion. Talks were processed for some time now, which surfaced around in November this year. Finally, the closed deal was announced on Tuesday, where Salesforce sealed the said deal in cash and stocks — the latest in a wave of business deals as the coronavirus pandemic augments the demand for tools that empower people to work remotely with ease.
This salesforce acquisition will conclude slack’s short-term run as an independent publicly-traded company (from mid-2019). The deal happens to be the biggest bet within the tech-driven corporate world among the recent surge in business merger-and-acquisition deals, especially focusses on capitalizing the gradual shift towards remote work facilities. Few other dealings within the domain that are worth mentioning include Adobe announcing acquiring Workfront – a management software company and Atlassian, a company dealing with tools for developers and project management, announced its acquisition of Mindville, an enterprise services business for an undisclosed amount.
What do Experts Have to Say on Slack and Salesforce Integration?
Experts from across industries all have their take on the salesforce-slack acquisition deal. Most of them feel that the event is a signal of how competitive the tech space, especially the software market, without a game-changing product, survival would become way too difficult.
According to Tuesday’s business-deal announcement, shareholders will receive somewhere around $26.79 in cash and 0.0776 shares of salesforce stock in exchange for Slack’s every share. Salesforce also mentioned that it has all the plans to incorporate the communication app’s software into every aspect of its cloud computing software offerings.
Being effusive about the slack and salesforce integration, chief executive of Salesforce, Marc Benioff narrated the journey with Stewart Butterfield, Slack’s chief executive, and Bret Taylor, president, Salesforce was no less than a “match made in heaven” as he marveled at the endless future possibilities of merging the two companies’ data and tool. Commenting on the acquisition, Taylor said that since the pandemic has initiated fundamental shifts in the lives of people prompting a new wave in consumer behavior, Slack and Salesforce team-up would help the latter’s huge customer base to accept a smoother digital transformation. Interestingly, nearly 90 percent of Slack’s enterprise customers also use Salesforce. Slack, which will now become an operational unit of Salesforce will continue to be headed by Butterfield.
Influence of Salesforce Stock on Slack’s Product
Founded by Butterfield in 2010, Slack grew exponentially and had attracted takeover offers from the likes of Google and Amazon to name a few, which however was rejected. Last year when Slack went public, its valuation was about $19.5 billion. However, later on, its stock prices sank to a considerable extent.
Slack’s main product that allows people to collaborate and communicate on a virtual basis, witnessed a surge in its user base during the lockdown period beginning early this year. However, despite the increased user base and registering a 49 percent revenue growth, the curve nosedived within some time. Layoffs at some of its leading customers also resulted in Slack’s business slipping down.
At the same time, there was stiff competition from leading giants, especially from Teams, Microsoft’s communication product that clocked a 50 percent growth between April and October 2020. On the other hand, Slack has not shared an update about is 12 million users since last year.
This year, slack’s shares though went up by 25 percent, it was way below the mark, which went public last year. However, since the salesforce news of the salesforce stock acquisition deal with Salesforce broke, share prices went up and Slack’s value has shot up more than $25 billion. The business heads and industry insiders continue to remain optimistic about this new business collaboration.