Salesforce announced on January 1st that they have entered into a definitive agreement to acquire the very popular communication and collaboration platform Slack. The price tag for this acquisition is a staggering 27.7 billion us dollars. This is the biggest software acquisition of 2020 and it will have a big impact on the communications market for 2021.
SAN FRANCISCO, Dec. 1, 2020 – Salesforce (NYSE: CRM), the global leader in CRM, and Slack Technologies, Inc. (NYSE: WORK), the most innovative enterprise communications platform, have entered into a definitive agreement under which Salesforce will acquire Slack. 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.
This is no small acquisition by any means and with Slack becoming and integrated part of the Salesforce Customer 360 suite it will make ripples across the communications and collaboration ecosystem for sure. Slack have been loosing ground to Microsoft's Teams in the last years and it will be interesting to see what the future holds for Slack with this acquisition.
For Salesforce, I think this is a great acquisition as it will add a very popular and useful communication service into their products. They also get a huge customer database with millions of Slack users that they can try to convert into Salesforce customers. Hopefully this will also make their Salesforce Customer 360 suite more attractive because they will need to bring in quite a few customers to cover that price tag.
For existing Slack users I don't think there will be much that will change in the short term. I assume Slack will still be available as a standalone product, just like for example Trello was when Atlassian purchased them. Speaking of Atlassian it will be interesting to see what this means as Atlassian have been closely collaborating with Slack since Atlassian cancelled their own chat based collaboration tools Hipchat and Stride that was sold to Slack in February 2019.
This acquisition surprised me a bit to be honest, but from a business perspective it makes sense from both lack and Salesforce perspective I think. It will be interesting to see what this means and if we might finally see a proper enterprise version of Slack or if Slack will slowly phase into Salesforce products and vanish...
Details on the Proposed Transaction
The board of directors of each of Salesforce and Slack have approved the transaction and the Slack board recommends that Slack stockholders approve the transaction and adopt the merger agreement. 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 has also entered into a voting agreement with certain stockholders of Slack common stock, under which each such stockholder has agreed to vote all of their Slack shares in favor of the transaction at the special meeting of Slack stockholders to be held in connection with the transaction, subject to certain terms and conditions. The Slack shares subject to the agreement represent approximately 55% of the current outstanding voting power of the Slack common stock.
Salesforce expects to fund the cash portion of the transaction consideration with a combination of new debt and cash on Salesforce’s balance sheet. Salesforce has obtained a commitment from Citigroup Global Markets Inc., Bank of America, N.A. and JPMorgan Chase Bank, N.A. for a $10.0 billion senior unsecured 364-day bridge loan facility, subject to customary conditions.
- Source: Slack Announcement