Salesforce, the CRM powerhouse that recently surpassed $20 billion in annual revenue, on Tuesday announced a US$27.7 billion deal to buy online collaboration firm Slack. Rumors of a pending deal surfaced last week, causing Slack’s stock price to spike.
SEE ALSO: Forex Responsible For Hike In Petrol Price In Nigeria- Expert
“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,” Salesforce Chief Executive, Marc Benioff said in a statement.
Slack Co-founder and CEO Stewart Butterfield said, “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,” Butterfield said in a release.
The deal is expected to close next year pending shareholder and regulatory approval.
Entering 2020, Slack had lost around 40% of its value since it went public. Consider that after its most recent earnings report, the company lost 16% of its value, and before the Salesforce deal leaked, the company was worth only a few dollars per share more than its direct listing reference price. Considering it’s uninspiring public valuations, slack was a sitting target for a rake over like this one. The only surprise here is the price.
READ: INCREDIBLE: Baby Shark Emerges Most-Watched YouTube Video of All-time
Slack’s current valuation, according to both Yahoo and Google Finance, is just over $25 billion, which, given its very modest price change after-hours means that the market priced the company somewhat effectively. Slack is up around 48% from its valuation that preceded the deal becoming known.