The United States based corporate software firm Salesforce.com Inc will be acquiring the Tableau Software Inc, which is a firm that deals with big data collection and analysis, for a deal worth $15.3 billion. This is the largest acquisition for the San Francisco, California based Salesforce in its history and is being seen by analysts to be an attempt of the company to be bale to offer big data analysis to its customers as an added service.
On the other hand, the large client base of Seattle-based Tableau, of more than 86,000 clients, also includes a number of very well known and large tech companies such as Verizon Communications Inc and Netflix Inc.
According to the acquisition deal, 1.103 of Salesforce shares would be owned by shareholders of Tableau which values the deal at $177.88 per share. That is a premium of 42 per cent to Friday’s closing price of Tableau’s shares.
In recent years, big data companies have been the target of large tech companies – such as the acquisition of big-data analytics company Looker for $2.6 billion by Alphabet Inc’s Google just days ago. This Salesforce deal also goes past its earlier deal worth $5.9 billion that the cloud-based software company had paid for the buying of the US software maker MuleSoft in 2018.
“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,” Wedbush Securities analyst Steve Koenig said.
The business of big data analytics is a complex one because it uses huge amounts of data to bring out hidden patterns and unknown correlations between variables as well as help companies to discover current and potential future market trends and customer preferences. Such information is critical for companies to offer better products and service to customers and to gain greater market share.
The Salesforce deal is expected to close in the third quarter of the current year following which Tableau would be operating as an independent entity. It is expected to be headed by its Chief Executive Officer Adam Selipsky and assisted by the current leadership team that it has.
“Tableau helps people see and understand data, and Salesforce helps people engage and understand customers,” Salesforce co-CEO Marc Benioff said. This deal would help Salesforce to add about $400 million in revenues for the year 2020, said the San Francisco-based company but also warned that the deal would also result in a reduction of its adjusted profit by about 37 cents to 39 cents per share.
Following the deal, the expected adjusted profit for the company would be in the range of $2.51 per share to $2.53 per share for 2020, the company said. According to IBES data from Refinitivm, analysts were expecting $2.90 per share.
After the announcement, the shares of Salesforce fell 5 per cent to $156.43 while there was an uptick of 35 per cent in the share price of Tableau to $169.50 during premarket trading.
“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 said.
(Adapted from TheHindu.com)