Salesforce.com, Inc., a San Francisco, California-headquartered cloud-based software company, as per recent press reports on Monday, Jun. 10th 2019, announced its decision to acquire Tableau Software Inc., a Seattle, Washington-based interactive data visualization software company, for $15.3 billion. With this marking the biggest acquisition in Salesforce’ entire history, the company has made its objective clear, that it plans on offering more data insights to its clients.
Seattle-based Tableau, with more than 86,000 customers, is well renowned in the software industry for its data visualization software. With tech heavyweight clients like Verizon Communications Inc. and Netflix Inc., Tableau has made its presence well known across the entire industry.
As part of this all-stock acquisition deal, Tableau’s shareholders are entitled to get 1.103 Salesforce shares, that estimates the per share offer at $177.88, depicting a 42% premium to Tableau’s last week closing price.
Salesforce’s acquisition deal comes days after Alphabet Inc.’s Google announced the acquisition of Looker for $2.6 billion. Also, the deal stands out as it surpasses Salesforce’ earlier acquisition of MuleSoft, in 2018 for $5.9 billion.
“The acquisition accelerates Salesforce’s roadmap for their Customer 360 initiative, which helps companies gain a complete view of their customers, and more broadly their analytics initiative,” states Steve Koenig, Analyst at Wedbush Securities.
Big data analytics is often a complex process that unearths hidden patterns, unknown correlations, market trends, and customer preferences to assist companies in making effective insightful decisions to boost their businesses.
The deal is expected to close by Q3 2019, after which Tableau will operate as an independent entity, with Adam Selipsky at its helm as the Chief Executive Officer, along with the Tableau’s current leadership team.
“Tableau helps people see and understand data, and Salesforce helps people engage and understand customers,” states Marc Benioff, Salesforce co-CEO. The San Francisco-based Salesforce’ anticipates a $400 million add up in its 2020 revenue with this deal, at a decreased adjusted profit of about 37 to 39 cents per share.
In premarket trading Tableau’s shares witnessed a 35% jump to $169.50, while Salesforce’ shares fell 5% to $156.43.
“Salesforce shares are trading down, may be out of fears that the company is buying growth because organic growth is slowing. It’s a natural question to ask,” Koenig added.
Salesforce engaged Bank of America Merrill Lynch as its official financial adviser on this deal, while Tableau roped in Goldman Sachs & Co. LLC for advice.