As it turns out, the rumours were true – San Francisco-based cloud software giant Salesforce is on track to acquire workplace chat app/remote work fixture Slack for a reported sum of US$27.7 billion (AU$37.6 billion), marking the latter’s biggest purchase ever.
“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,” outlines the official press release.
Slack’s meteoric rise is one which few could ignore. Established a decade ago, between 2014 to 2019:
- daily users increased from 400,000 to 12 million
- paid users increased from 70,000 to 6 million
- total revenue increased from US$12 million to US$630 million
- funding has increased from US$164 million to US$1.3 billion
- and as for the matter of valuation, what was initially US1.1 billion has since been revised to the considerable present-day figure of US$17 billion
Now backed by the reputed #1 customer relationship management system in the world, Slack will look to expand its presence in the enterprise across the board, but more importantly, take on industry incumbents like Microsoft. And investors seem fairly optimistic about their chances despite the news of Salesforce’s slowing revenue growth and weak Q4 forecast, with Slack’s share price (NYSE: WORK) jumped from a touch under US$30 to US$43.85 at the time of this writing. That’s an impressive gain of +48.24% in the past week alone (when talks of an impending acquisition were peaking). Currently, Slack’s market capitalisation is sitting at around US$25 billion.
“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,” says Stewart Butterfield, Slack CEO.
“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.”
“Stewart and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it,” says Marc Benioff, Salesforce CEO.
“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.”