Vancouver-founded communications software company Slack is set to be acquired by Salesforce for $27.7 billion USD, in a cash and stock deal.
In an announcement accompanying its third-quarter earnings, Salesforce said Tuesday it had entered into a definitive agreement with Slack, a week after rumours surfaced of the potential deal. Since the Wall Street Journal was first to report the potential deal, Slack’s value has risen to more than $25 billion on the New York Stock Exchange (NYSE).
Marc Benioff, chair and CEO of Salesforce, described the acquisition of Slack as “a match made in heaven.”
Following the acquisition, Slack will become the new interface for Salesforce Customer 360, a tool that allows companies to connect Salesforce apps in order to build a single view of a given customer.
Salesforce is offering Slack shareholders $26.79 in cash and 0.0776 Salesforce shares for each share of Slack they own, representing $45.54 per Slack share.
“Stewart [Butterfield, CEO] 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 of Salesforce.
“This is a match made in heaven,” added Benioff. “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.”
Slack went public on the NYSE in June 2019 via direct listing, sidestepping the process of its long-awaited initial public offering (IPO). Before reports of the acquisition of Salesforce arose last week, Slack’s stock stood close to $26, which was its initial listing price last year.
The company has reported significant customer growth during the COVID-19 pandemic, as businesses around the world were forced to shift operations remote and demand on communication software surged. According to its Q1 financial report released in June, Slack added a record 12,000 net new paid customers in the quarter, bringing the total to 122,000 paid customers, an increase of 28 percent year over year.
Slack was founded in 2009 by Butterfield and has since made several acquisitions and investments in the past to boost its messaging platform. The company is now headquartered in San Francisco.
“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,” said Butterfield. “Personally, I believe this is the most strategic combination in the history of software, and I can’t wait to get going.”