Salesforce announced today that it will acquire struggling Slack for $27.7 billion in a bid to turn around the flailing maker of a chat-based productivity app. That’s an incredible sum for a firm that has lost 40 percent of its value since it went public and has posted two sequential quarterly losses in a year in which its type of service should be more popular than ever.
“Stewart [Butterfield] and his team [at Slack] have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it,” Salesforce chairman and CEO Marc Benioff said in a prepared statement. “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. I’m thrilled to welcome Slack to the Salesforce [internal support system] once the transaction closes.”
According to the terms of the deal, Salesforce will pay Slack shareholders $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion, based on the closing price of Salesforce’s common stock on November 30, 2020. Slack will become an operating unit of Salesforce and will continue to be led by its current CEO, Stewart Butterfield.
According to Salesforce, it intends to use the Slack acquisition to build an “operating system for the new way to work,” a unified platform by which it will connect employees, customers, and partners with each other and the apps they use. More specifically, it will deeply integrate Slack with Salesforce’s cloud services and make Slack “the new interface for Salesforce Customer 360.”
Good luck with that, Salesforce.