Published On : 2019-06-11
Salesforce.com, a US cloud-based software company, has agreed to purchase Tableau Software, a US-based interactive data visualization software company, in what could be its biggest acquisition deal to date. In 2018, Salesforce bought MuleSoft in a $6.5 billion cash and stock deal. Salesforce will acquire Tableau in a $15.3 billion all-stock deal. The acquisition will help Salesforce to provide more data insights to its customers. Representing a premium of 42% of Tableau’s closing price on Friday, the deal will see Tableau shareholders receiving 1.103 Salesforce shares. It comes only days after Google acquired Looker for $2.6 billion.
“Tableau helps people to understand and see data, and our company helps people to understand and engage customers,” said Marc Benioff, co-CEO of Salesforce.
Deal expected to add close to $400 million to Salesforce’s 2020 revenue
According to Salesforce, the acquisition of Tableau is expected to increase Salesforce’s revenue with an addition of approximately $400 million in 2020. Yet, the company’s projected 2020 adjusted profit falls short of the analysts’ expectation of $2.90 per share. The company is expecting the adjusted profit to stay somewhere between $2.51 per share and $2.53 per share. The acquisition will reduce its adjusted profit by around 37-39 cents per share.
According to sources, the acquisition is anticipated to see a closure in Q3 2019, post which Tableau will function independently under the leadership of Adam Selipsky, the company’s CEO, and the existing leaders. Acquiring Tableau will help Salesforce to accelerate its strategy for its Customer 360 initiative, which helps companies in having a broader, complete view of their analytics initiative and also their customers.
In premarket trading, Salesforce shares dropped 5% to $156.43 and Tableau shares soared 35% to $169.50. Analysts say that there are concerns around Salesforce’s organic growth, and that the shares are trading down because it seems the company now needs to buy growth. Tableau has over 86,000 customers, which include Netflix, Verizon Communications, and other tech heavyweights. It is popular for its analytics dashboards and chart applications. It has been looking to compete in a broader data-warehousing space with the inclusion of machine learning and data cleanup tools in its product portfolio.
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