CRM giant, Salesforce announced today it is acquiring Slack in a deal said to be worth $27.7 billion. Rumours of an impending deal surfaced last week causing a spike in Slack’s stock price. This acquisition makes the deal the biggest purchase ever by Salesforce.
Under the terms of the agreement as shared in a press release, “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.”
“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.”
“Salesforce started the cloud revolution, and two decades later, we are still tapping into all the possibilities it offers to transform the way we work. 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 organization, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organizational agility. Personally, I believe this is the most strategic combination in the history of software, and I can’t wait to get going.”
The timing of the deal couldn’t be more perfect for Slack with the work chat app entering 2020 with a 40 percent loss in its value since going public. Before the Salesforce rumour began, Slack announced a 16 percent loss in its value in its latest earnings report and had recorded a net loss of $147.6 million as at the ending of the second quarter on July 31, 2020.
Slack began as a gaming company called Glitch in 2009 before transitioning to a work chat app in 2013. With a market value of $25 billion, Slack has grown immensely and is a close rival to Microsoft’s Teams in the market.