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NEW YORK (Reuters) – Cloud-based software company Salesforce. com Inc is in talks to acquire Slack Technologies Inc for the workplace messaging app to expand its offering to businesses, it announced on Wednesday.
Salesforce’s offer comes because, given stiff competition from Microsoft Corp teams and other workspace apps, Slack is struggling to take full advantage of the move to remote working during the COVID-19 pandemic
Slack stock ended Tuesday at $ 29. 57, well below the $ 42 high it hit on its first day of trading last year.
Salesforce sees the potential acquisition as a logical extension of its corporate offering. The price Slack was offering could not be determined, although one of the sources said Salesforce would pay for the deal in cash rather than using its shares as currency.
If negotiations are successful, a deal could be announced before Slack reports a quarterly profit in December. 9, one of the sources added.
Slack Technologies shares rose 24% to $ 36. That translates to a market cap of $ 21 billion for the company, while Salesforce is down 2. 7% after the Wall Street Journal first reported the two companies were in deal talks.
Slack has benefited from companies relying more on information technology systems to keep their employees connected during the pandemic.
The app has been installed about 12 times. According to the analysis company Sensor Tower, this year has been 6 million times more than 50% more than in the same period in 2019.
But the economic fallout from the virus outbreak has forced Slack to offer discounts and payment concessions to many of its customers who have had to cut costs.
To save money, some companies have also switched to Teams, which comes with many of Microsoft’s Office software packages.
« I think Microsoft Teams took the opportunity better than Slack, partly because they gave it away as a bundle for free, » said Rishi Jaluria, an analyst at research firm DA Davidson and Co. .
« Now Slack realizes that as part of a larger company, they can potentially achieve greater penetration. ”
Slack invoice growth, a key indicator of future revenue, slowed in the three months ended July.
Salesforce has now done well financially during the pandemic. The annual revenue forecast was raised in August as the pandemic fueled demand for online business software for remote working and trading.
Salesforce has strengthened its cloud business through acquisitions and spent more than $ 16 billion last year to stave off competition from rivals like Oracle Corp and German competitor SAP.
coverage of Greg Roumeliotis and Krystal Hu in New York; Additional reporting from Subrat Patnaik and Eva Mathews in Bengaluru; Editing by Arun Koyyur and Jan Harvey
All offers were delayed by at least 15 minutes. A full list of exchanges and delays can be found here.
Salesforce, Slack Technologies, Warehouse, Customer Relationship Management, Cloud Computing, NYSE: CRM
World News – USA – Salesforce in talks to acquire Slack sources for workplace apps
Ref: https://www.reuters.com
