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Update 22/04/2024 – Salesforce does not appear to have closed the deal with cloud data management firm Informatica. The companies can’t agree on the terms of Salesforce’s proposed acquisition. If the deal had gone through, it would have been one of the largest acquisitions Salesforce—already known for its acquisition appetite—had undertaken.

We reported earlier that the companies were in advanced talks to reach an acquisition. However, Reuters reports that the deal now appears to be off the table. Salesforce wanted to pay a price per share between $30 and $40, less than the recent rise in the cost of Informatica shares. The price increase was probably due to the impending acquisition.

One Informatica share was doing 35.19 euros at the close of trading last Friday. That makes the company worth 11.2 billion euros, including debt.

Original – Salesforce is on the verge of acquiring data management company Informatica. If the deal goes through, it would be one of the company’s largest acquisitions to date.

Talks between the two companies are said to be in full swing and a possible deal could be completed this month, The Wall Street Journal reports. Informatica helps customers manage their cloud data and is currently valued at more than $11 billion.

However, Salesforce’s offer is below Informatica’s recently increased stock price ($38.48 per share at the close of the NYSE on Friday). That price increase is partly due to investors betting on a deal between the companies.

Salesforce has had a huge appetite for acquisition in recent years. Since its first acquisition in 2006, the CRM giant gobbled up more than 70 companies. The most recent are software integration platform MuleSoft for $6.5 billion in 2018, Tableau (data analytics and visualization) for 15, 7 billion in 2019 and team communication platform Slack for $27 billion. The latter acquisition is from 2021.

Investors put the brakes on acquisitions

After that last takeover, activist investors curbed Salesforce’s aggressive approach to mergers and acquisitions. Among those investors were the hedge funds Elliott Investment Management and Starboard Value. According to these funds, Salesforce needed to do more to grow its revenue. It was lagging behind because (potential) customers were holding back on software spending. Salesforce also struggled with declining revenues after an earlier strong growth during the coronavirus pandemic.

Salesforce responded in 2023 with layoffs, budget cuts, and the dissolution of an acquisitions committee. The company also bought back $20 billion of its own shares in an effort to show confidence in its future to shareholders. After sharing his position with Bret Taylor for some time, Co-founder Marc Benioff became the company’s sole CEO again. The latter, incidentally, joined Salesforce because his company, Quip, was acquired in 2016.

The changes were not without results. Already in the first quarter of 2023, revenue rose to $8.38 billion, 14 percent more than the same period the year before. Salesforce thus managed to reassure investors. The promise of AI tools also lifted Salesforce shares back up.

Also read: 25 years of Salesforce; from a 1-bedroom apartment to world domination