Salesforce is acquiring the popular workplace and organization chat app Slack for an estimated $ 27.7 billion. The deal is set to become one of the largest business acquisitions of 2020 and will see Salesforce add another string to its already substantial bow.
The deal exceeds the $ 26.2 billion Microsoft paid for LinkedIn, further establishing Salesforce as one of several companies dominating the cloud computing sector.
Why Is Salesforce Buying Slack?
Salesforce is a cloud computing software company that delivers, among other things, one of the world’s most popular customer relationship management (CRM) tools.
One thing lacking from Salesforce’s array of software has been a dedicated chat app. However, that position has now been filled.
The merger focuses on bringing more services in-house. If users don’t have to leave Salesforce services, they’ll spend more time and more money using them. Most software licensing has also moved to the Software as a Service model, which ties Slack nicely into the Salesforce model.
At the time of writing, little is known regarding how the platforms will integrate, but Slack comes with around 12 million users across its free and premium platforms.
In the official Salesforce press release, Chair and CEO Marc Benioff said:
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.
Struggling Slack Was Ripe for Purchase
It is a good time for Salesforce to make the acquisition, too.
Since going public in 2019, Slack had lost around 40 percent of its value. The company reported losses of $ 147.6 million for the first two quarters of 2020, missing out on the boom in cloud computing and remote communication services the COVID-19 pandemic brought forth.
Despite the outward appearance of growth, Slack struggled to compete with the major players in the communication-cum-productivity suite space. Other tech companies, such as Microsoft, operate similar packages with extensive integrations into their own platforms, which Slack couldn’t entirely keep pace with.
The terms of the acquisition note that “Slack shareholders will receive $ 26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share.” So, if you own stock in Slack, check your accounts, as there could well be a small windfall waiting for you just in time for the holiday season.