The American cloud-based software company Salesforce Inc affirmed to acquire big data organization Tableau Software Inc for $15.3 billion. This the biggest acquisition in the history of the company which aims to offer more insights derived from data to its clients.
The Seattle based company has above 86,000 industry customers. Tableau’s customer list also includes big whales like Verizon Communications Inc., Charles Schwab, Schneider Electric, Southwest and Netflix Inc.
This acquisition came a few days after Google bought Looker which is a big-data analytics company for $2.6 billion.
The Salesforce and Tableau deal is likely to close in the 3rd quarter after which Tableau may work independently. The latter will operate under its own name after the acquisition and remained headquartered in Seattle, Washington. The office will be headed by current CEO Adam Selipsky along with other leaders in the team.
Why Tableau Got Acquired?
So pattern seems like – Major tech companies are acquiring firms with strong big data and business intelligence functionalities. The recent upsurge in the demand for big data analytics technology is compelling significant companies to embrace new tech-adoptions.
Data analytics is one complicated process to decode hidden patterns, correlations, market trends and prepare an ideal insight to move further with better business decisions.
Additionally, the shares of Salesforce were trading down. Few experts also believe that due to a reduction in the organic growth rate, the company is purchasing growth by acquiring one of the market leaders in business intelligence.
Notably, Salesforce had set its eye of Tableau for years, stated industry professionals.
How Acquisition will Impact Salesforce and Tableau?
This deal is considered to be quite huge for Salesforce in order to move ahead of CRM software and delve deep into data analytics. The deal will support the company in extending its engagement and data intelligence for the current users.
The deal is bringing market leaders of CRM and Analytics platform, together. While Tableau will aid customers to see and understand data, Salesforce will drive engagements and understanding of the customers.
The company officials confirmed that Seattle would become second official headquarters for Salesforce after the closure of this deal.
Additionally, joining hands with Salesforce will accelerate the abilities of Tableau to expand its reach and make them understand data better. The company’s strengthened analytics will allow millions of people to decipher insights for the betterment of their organizations.
Salesforce understands the needs of its customers and avails them with solutions which are quintessential to grow their businesses. Along with data, which is the core of every digital transformation, Tableau will enhance Salesforce’s capabilities to deliver customer success.
How Merger will Impact Market Shares and Revenues of Both the Companies?
As it is an all-stock deal, shareholders of Tableau will be provided with 1.103 shares of Salesforce. These shares of the latter value the offer at $177.88 per share which represent a premium of 42 percent of Tableau’s closing price on Friday.
Tableau is publicly traded and the deal will include its shares Class A and Class B common shares which will be exchanged for 1.103 shares of Salesforce common shares. That’s how $15.7 billion becomes the enterprise value of the transaction.
According to Google Finance figures, the transaction value depicts a huge jump on Tableau’s last market capital which was valued $10.79 billion by the end of its closing on Friday.
Notably, currently, the trading is halted due in the light of this deal’s news.
Also, the deal is expected to add $400 million in the company’s 2020 revenue but on the other hand, it would reduce adjusted profit by 37-39 cents per share.
Salesforce expects 2020 adjusted profit in the range of $2.51-$2.53 per share.
In premarket trading, shares of Salesforce fell 5 percent to $ 156.43 while that of Tableau soared up to 35 percent to $169.50.
The merger aims at dedicating great input in the drive towards digital transformation which would enable both the companies to stay ahead with data across their whole business. The deal will surface deeper insights to produce smart decisions, drive intelligent customer experiences and accelerate innovative aura of the business altogether.