The company went public in 2019 at a market cap of $19.5 billion, but has seen its valuation drop by 40% by the beginning of 2020 due to lackluster earnings. Founded in 2009 as a game developer under the name Tiny Speck, the company launched its widely successful real-time collaboration application in 2013 and has become one of the hottest software companies in the last decade, changing its name to Slack in the process. However, Slack’s growth lags significantly behind other software developers such as Zoom, which grew 366% year-on-year for the same period. Slack has also benefited from the work-at-home economic shift, with revenues growing by 39% year-on-year in the third quarter of 2020. The recent growth is partially driven by global lockdown conditions which has generally boosted the revenues of software companies, but is also due to the company’s recent product growth with the addition of cloud payments and marketing data solutions. That leaves an earnings-per-share figure of $4.62, which is well above analysts’ predictions. Salesforce has had a good year financially, surpassing $21 billion in annual revenue for 2020. The firm is one of the largest software companies in the world, employing 49,000 people around the world and currently sitting at a market value of over 204 Billion. Company overviewįounded in 1999, Salesforce is an American cloud software company which primarily offers CRM services. Despite the drop in value, Salesforce and Slack are confident that this deal aligns with the strategic objectives of both firms, combining Slack’s business communications software with Salesforce’s Customer Relationship Management (CRM) products to create a comprehensive and collaborative enterprise platform. Meanwhile, Salesforce’s stock plummeted by 15.4% from before the deal was announced, leading to a total loss in market value of $32 billion USD. Markets reacted immediately as Slack’s stock price soared by 38% within the first day. This acquisition would go down as the second largest software transaction in history, the price of which represents a 55% premium to Slack’s market cap at the time of announcement. To cap off an extraordinary year for businesses worldwide, Salesforce has officially announced on the 1st of December, 2020 that it would be acquiring collaboration software developer Slack for $27.7 billion USD. Julia La Roche is a correspondent for Yahoo Finance. Shares of Salesforce are up 7.9% year-to-date. Shares of Salesforce were last trading up 0.14%, or 34 cents, near $240.45 in the pre-market. Every business-in every industry-has to optimize for a digital-first customer, employee, and partner experience," the company said in its announcement. "Headquarters are no longer on Madison Avenue or Main Street-they are in the cloud. Last week, the Department of Justice told the company it closed its antitrust investigation of the deal, giving the green light for the transaction's close.Īs companies debate the future of work post-COVID, Salesforce said companies learned last year that "if you don't have a digital way to connect with your employees, customers, and partners, you don't have much of a chance of surviving." In December, Salesforce signed a definitive agreement to acquire the popular messaging software platform Slack Technologies in a cash and stock deal worth $27.7 billion, making it Salesforce's largest-ever acquisition. I could not be more excited for what's to come," Butterfield added. "Salesforce and Slack are uniquely positioned to lead this historic shift to a digital-first world. Slack's co-founder and CEO Stewart Butterfield, who will continue to lead the company, called the deal "a once-in-a-generation opportunity to rethink and reshape how and where we work."
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