Salesforce to buy office chat app Slack for $28 billion – Times of India

SAN FRANCISCO: Salesforce said on Tuesday that it would buy workplace software company Slack for $27.7 billion in cash and stock, the latest in a wave of deals as the pandemic boosts demand for tools that enable people to work remotely.
If completed, the acquisition will end Slack’s brief run as an independent publicly traded company — it went public in mid-2019 — and cap an acquisitive streak by Salesforce, which provides marketing and sales software, with its largest deal since it was founded 21 years ago.
The deal is the biggest bet among a recent spate of acquisitions made by tech companies to capitalise on the shift to remote work.
Shareholders will get nearly $27 in cash and close to 0.1 shares of Salesforce stock in exchange for each share of Slack, according to Tuesday’s deal announcement. Salesforce said it planned to incorporate Slack’s communication software into every aspect of its cloud software offerings.

Salesforce CEO Marc Benioff was effusive about the combination, calling it “a match made in heaven”. Bret Taylor, Salesforce’s president, said the pandemic had fundamentally shifted consumer behaviour and the way people work. Buying Slack would help Salesforce’s customers make the digital transformation, he said. Roughly 90% of Slack’s enterprise customers also use Salesforce.
Slack, which was founded in 2010 by its current CEO Stewart Butterfield, grew quickly and previously attracted — and rejected — takeover offers from Google, Microsoft and Amazon. Butterfield will continue leading Slack, which will become an operating unit of Salesforce. Its valuation was about $19.5 billion when it went public last year, but its shares sank later.
While Slack said in September that the pandemic had created a “significant increase in demand and usage of Slack”, it also said it did not expect that rise to continue. On Tuesday, Slack reported that revenue grew 39% in the three months ending in October. At the same time, Slack has faced increasing competitive pressure from Microsoft. Teams, Microsoft’s collaboration product, reported 115 million daily users in October, up 50% from April. Slack has not provided an update on the 12-million daily users it reported a year ago.
Salesforce has been highly acquisitive as it looks to grow. Under Benioff, Salesforce has bought at least 60 companies, including 27 during the last five years, according to S&P Capital IQ.