Salesforce is in talks to accumulate Slack, and a deal might be announced as soon as next week, consistent with an individual conversant in the matter. Shares of Slack closed almost 38% higher Wednesday after the Wall Street Journal first reported that Salesforce held talks to shop for the corporate.
Salesforce, whose stock closed down 5% on Wednesday, is scheduled to release its fiscal third-quarter earnings next week. It’s unclear what proportion the deal would be worth, but Slack’s market cap ballooned to quite $20 billion following the WSJ’s original report.
Salesforce has been on a purchasing spree, taking advantage of its market cap growth in recent years to shop for growing companies. It acquired MuleSoft for $6.5 billion in 2018, the company’s biggest deal ever at the time, to assist connect cloud applications.
The following year it spent quite twice that quantity on Tableau, acquiring the info visualization company for $15.3 billion.
Slack would be one of the most important software deals ever for the industry. It might rank among IBM’s $34 billion buys of Red Hat in 2019, Microsoft’s $27 billion buys of LinkedIn in 2016, and Facebook’s $19 billion purchase of WhatsApp in 2014.
“This would be a turning point move for Benioff & Co. to further build out its partnership engine and merchandise footprint as cloud spending ramps across the enterprise,” Wedbush Securities’ Dan Ives told CNBC, concerning Salesforce CEO Marc Benioff. Shares of Microsoft, which competes with Slack through its Teams offering, also dipped slightly on the report.
Microsoft already competes with Salesforce in software for tracking customers. In 2016 TechCrunch reported that Microsoft checked out buying Slack for up to $8 billion, but no deal happened. Later that year Microsoft launched the Teams communication app.
“Our primary competitor is currently Microsoft Corporation,” Slack said when it wanted to become a public company in 2019. Microsoft features a large customer base it’s been ready to convert to groups, and Salesforce could give Slack an identical advantage.