UPDATE: Salesforce’s pending acquisition of team chat software vendor Slack was made official in December 2020. Marc Benioff, chief executive officer at Salesforce, called the now $27.7 billion deal “a match made in heaven.”
SAN FRANCISCO – Customer-relationship-management software-as-a-service (SaaS) giant Salesforce reportedly is in talks to acquire Slack Technologies Inc., a cloud-based chat platform for workspaces. The Wall Street Journal, which first reported the story, said a deal could be announced as soon as next week.
Publicly traded Slack’s shares rose 34 percent as the rumor made the rounds, while Salesforce shares slid about 5 percent. Overall, Salesforce stock experienced a 60-percent rise this year, for a current market valuation of $227 billion.
WSJ analysts said any deal likely would value Slack above its pre-rumor market cap of $17 billion, making it Salesforce’s largest acquisition to date. In 2019, Salesforce acquired data-visualization company Tableau Software Inc. in an all-stock transaction valued at $15 billion. A year earlier, Salesforce acquired integration software developer MuleSoft for $6.5 billion in cash and stock.
The Slack acquisition, if it occurs, would rank fourth among the largest transactions ever in the software sector, behind IBM‘s 2019 purchase of Red Hat for $34 billion, Microsoft‘s $27 billion acquisition of LinkedIn in 2016, and Facebook‘s $19 billion WhatsApp buy in 2014.
Salesforce is not Slack’s first suitor. Microsoft tried to buy the company for $8 billion in 2016, but the two never sealed a deal. Microsoft subsequently developed Teams, which competes with Slack head-to-head. Microsoft’s shares also dipped slightly on news of the potential Salesforce-Slack union.
In October 2019, Slack reported an active customer base of 12 million daily users. By end of trading November 25, the company’s market cap had ballooned to $22 billion.