Salesforce’s $27.7bn Acquisition of Slack

By Demi Akinjide, Saihejpal Ailwadhi, Ben Fobel, Zac Greenberg, Will Sergent (University of Bristol), Sally Marshall, Max Raso, Valeriya Shreyber, Izer Onadim (Imperial College London)

 

Overview of the deal


Acquirer: Salesforce

Target: Slack

Implied Equity Value: XXX

Total Transaction Size: $27.7 billion

Closed date: July 2021 (expected date)

Target advisor: Qatalyst Partners LP and Goldman Sach & Co LLC

Acquirer advisor: Bank of America


Salesforce (NYSE:CRM) and Slack Technologies (NYSE: WORK) established a definitive agreement enabling the acquisition of Slack. Subsequent to this agreement, shareholders of Slack earned $26.79 in cash and 0.0776 shares of Salesforce common stock for each share of Slack - providing a combined $45.86 a share. The acquisition would happen at a 55% premium to the company’s equity. It appears to be confirmed that Salesforce will finance its cash through a series of current cash on hand and new debt; given this, they were provided a 364 day $10 billion bridge loan through J.P.Morgan Chase, Citigroup and Bank of America — indicating the commitment received from this deal.


“Slack changes everything and makes Salesforce a whole new type of company - Salesforce CEO Marc Benioff

Company Details: Acquirer – Salesforce


Salesforce is a cloud-based software company. It provides a customer relationship management service and sells a complementary suite of enterprise applications focused on customer service, marketing automation, analytics and application development.


Founded in 1999, headquartered in San Francisco, United States

CEO: Marc Benioff

Number of employees: 49,000 (2020)

Market Cap: $204.26B (as of 03/12/2020)

EV: $216.19B

LTM Revenue: $17.1Bn

LTM EBITDA: $2.52B

LTM EV/Revenue: 12.64x

LTM EV/EBITDA: 85.79x


Company Details: Target - Slack Technologies, Inc.


Slack Technologies is an international software company. The software Slack itself is a channel-based messaging platform. With Slack, people can work together more effectively, connect all their software tools, and find the information that they need.