Salesforce to acquire Slack for $27.7 billion

Salesforce.com Inc, a cloud-based software company on Tuesday announced its plans to acquire communications platform Slack Technologies Inc.

Salesforce and Slack Technologies, Inc have entered into a definitive agreement under which Salesforce will acquire Slack.

As per the terms of the agreement, Slack’s shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share. This values the deal at approximately $27.7 billion, based on the closing price of Salesforce’s common stock on November 30, 2020.

As part of the deal, Salesforce will integrate Slack with its Customer Relationship Management (CRM) solution, Salesforce Customer 360.

“Slack will be deeply integrated into every Salesforce Cloud,” Salesforce said in an official release.

Also read: Salesforce in advanced talks to acquire Slack

Slack will be the new interface for Salesforce Customer 360, which will also provide the communications platform with the opportunity to expand its presence in the enterprise segment.

“The opportunity we see together is massive,” said Stewart Butterfield, Slack CEO and Co-Founder. “As software plays a more and more critical role in the performance of every organisation, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organisational agility.”

“Stewart and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it,” said Marc Benioff, Chair and CEO, Salesforce. “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.”

“The transaction is anticipated to close in the second quarter of Salesforce’s fiscal year 2022, subject to approval by the Slack stockholders, the receipt of required regulatory approvals and other customary closing conditions,” Salesforce said.

The board of directors of both companies have already approved the transaction.

Salesforce has also entered into a voting agreement with certain stockholders of Slack common stock. As part of the agreement, each stockholder of common stock has agreed to vote all of their Slack shares in favour of the transaction at the special meeting of Slack stockholders to be held in connection with the transaction, subject to certain terms and conditions, Salesforce said.

These shares represent approximately 55 per cent of the current outstanding voting power of the Slack common stock.

Also read: We will bring in more India-focussed products, says Salesforce chief

The CRM major will fund the cash portion of the deal through a combination of new debt and cash on Salesforce’s balance sheet.

Citigroup Global Markets Inc, Bank of America, N.A. and JPMorgan Chase Bank, N.A. have committed $10 billion senior unsecured 364-day bridge loan facility in total, subject to customary conditions.

This is one of the company’s biggest acquisitions yet. Reports of the deal began circulating last week. The talks were first reported by the Wall Street Journal.

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