SALESFORCE’S Marc Benioff is pursuing what would be one of the company’s biggest-ever deals after fending of activists investors critical of his reliance on acquisitions.
This time Benioff is targeting Informatica, according to sources familiar with the matter, in a move that would add to Salesforce’s data integration and management capabilities.
The two companies have been in talks and could reach a deal as soon as within a week, said the sources, who asked not to be identified because the talks were private. A final agreement could take longer than that, or the talks could still end without one, they added.
A Salesforce spokesperson said the company does not comment on “rumours and speculation”. Informatica could not be reached for comment. The talks were reported earlier by The Wall Street Journal.
Informatica competes against what is currently Salesforce’s third-largest acquisition, MuleSoft, wrote Bloomberg Intelligence’s Sunil Rajgopal in a note. The deal could push further consolidation in the software-as-a-service industry and attract regulatory scrutiny, he added.
Salesforce chief executive officer Benioff has been grappling with activist hedge funds pressing the company to run a tighter ship. Salesforce averted a potential proxy fight with activist investor Elliott Investment Management last year, after a series of strategic changes and a rise in the stock price.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Informatica, based in Redwood City, California, had a market value of about US$11.4 billion at the close Friday in New York. The shares have jumped 36 per cent this year to US$38.48. The company, which helps customers manage their data in the cloud, projected in February that fiscal-year revenue would increase about 6 per cent to US$1.7 billion.
San Francisco-based Salesforce has cut costs and improved profitability over the past year. Now, the focus is on sales growth, which has slowed as corporations rein in their spending on software.
Informatica would rank as the company’s third- or perhaps second-biggest acquisition out of 117 completed and pending deals, according to data compiled by Bloomberg. Salesforce’s largest acquisition – a takeover of the business communications platform Slack Technologies for about US$27 billion – was completed in 2021.
Should the Informatica deal go through with a significant premium to the current share price, the amount could rival Salesforce’s US$14 billion purchase of Tableau Software in 2019, according to the data. Including debt, Informatica has an enterprise value of more than US$12 billion, the data show.
Salesforce said in 2018 that its 2018 acquisition of MuleSoft represented an enterprise value of US$6.5 billion.
Informatica was taken private in 2015 by private equity firm Permira and the Canada Pension Plan Investment Board (CPPIB) in a US$5.3 billion transaction. They took the company public again in 2021 with its shares priced at US$29 each. The stock peaked at almost US$39 two months later before sinking to near US$14 last year.
Permira, with almost 47 per cent of Informatica’s shares, remains the company’s largest stockholder, according to data compiled by Bloomberg. CPPIB owns about 29 per cent of the shares. BLOOMBERG
