Cloud computing giant Salesforce is acquiring the Slack workplace chat app, the two companies announced Tuesday. The deal, the rumble of which began last week, represents one of the most successful acquisitions of the business software industry in recent years and the largest acquisition of Salesforce to date.
Salesforce is paying $ 27.7 billion for Slack, the press release said. “Under the terms of the agreement, Slack shareholders will receive $ 26.79 in cash and 0.0776 ordinary shares of Salesforce for each Slack share, representing a corporate value of approximately $ 27.7 billion based on the closing price of the regular share of Salesforce on November 30, 2020,” in the Communication.
“Stewart and his team have built one of the most popular platforms in the history of enterprise software, surrounded by an incredible ecosystem,” said Marc Benioff, CEO of Salesforce. “It’s a match made in the sky. Together, Salesforce and Slack are shaping the future of enterprise software and transforming everyone’s way of working in a fully digital, workable world. I’m excited to welcome Slack to Salesforce in Ohana as soon as the transaction is complete.
“Salesforce has launched the cloud revolution, and two decades later we are still taking full advantage of the opportunities it offers to transform the way we work. The opportunity we see together is huge, ”said Stewart Butterfield, CEO of Slack. “As software plays an increasingly critical role in the performance of any organization, we have a shared vision of reduced complexity, increased strength and flexibility, and ultimately greater alignment and organizational mobility. Personally, I think this is the most strategic combination in the history of software and I can’t wait to get started. “
Slack, a fast-growing startup founded in 2009 as a gaming company, has become one of Microsoft’s biggest competitors, with more than 12 million daily active users (and probably many more, although the company did not provide specific information in numbers) and a market value of nearly $ 25 billion . The company, led by Flickr co-founder Butterfield, started primarily as an email alternative, offering itself to startups, media companies and other tech-savvy businesses to better manage office communications.
But Butterfield and his team have grown into a complete productivity package with video conferencing features, file storage, IT administration, and all the other features typically offered by large corporations. Earlier this year, the company expanded its partnership with IBM, the company’s total of more than 350,000 employees.
However, Slack has struggled with fierce competition not only from Microsoft but also from Facebook and other companies that have launched their own office chat and productivity platforms. The company has lost nearly half of its market value since its listing in April 2019 and has been unable to make a profit over the past three quarters despite an increase in telecommuting due to COVID-19. The company had no obvious path to becoming profitable, and there was no clear way to overcome the growing pressure from Microsoft Teams, which made a potential acquisition more likely each quarter.
Salesforce, which is also one of Microsoft’s biggest competitors but in the cloud sector, is worth nearly $ 220 billion and has grown into one of the largest software companies on the planet thanks to its customer relationship management software that helps businesses manage online sales.
Both Salesforce and Slack only became more vital during the coronavirus epidemic as companies around the world began telecommuting and a significant portion of their businesses moved online. Yet, unlike Slack, whose roller coaster has risen and its share price has fallen sharply, the market value of Salesforce has only expanded in recent months. Its shares peaked in September. The combination of Salesforce and Slack will ensure that both platforms can better compete with Microsoft, Oracle and other cloud and enterprise companies in the future.