Salesforce.com CEO Marc Benioff delivers the keynote speech at the Dreamforce 2023 conference in San Francisco on September 12, 2023.
Marina Sloss | Bloomberg | Getty Images
salesperson announced Thursday that it will acquire Own Co., a startup that specializes in cloud application data backup tools, for $1.9 billion in cash. Salesforce said it intends to close the deal in the quarter ending January 2025, subject to regulatory approval statement.
The new startup, formerly known as OwnBackup, will be valued at $3.35 billion in 2021 Financing round. Salesforce Ventures, the venture capital arm of the cloud software company, participated in this and previous investments.
Co-founder and CEO Marc Benioff told the board that the proposed deal would mark a return to large-scale deals for Salesforce. Eliminating Mergers and Acquisitions Committee.
Benioff’s announcement comes after activist investors bought stakes in Salesforce and raised questions about the company’s profitability as it spends heavily on expensive assets including MuleSoft and Slack but doesn’t Delivers significant growth returns.
The decline in Own’s value reflects a more subdued backdrop for software companies.
Investor interest in cloud software waned at the end of 2021, and its adoption surged in 2020 due to remote working policies enacted in the wake of the COVID-19 pandemic. Central banks have raised interest rates to combat inflation, prompting loss-making cloud companies to focus more on profitability. Companies aiming to cut IT budgets have consolidated purchasing, placing a burden on single-product companies, including startups and public companies.
Anaplan, Avalara, Coupa, Everbridge, Qualtrics, Sumo Logic and Zendesk have all been taken private.
Own specializes in helping Salesforce customers and is now looking to diversify. In its 2021 funding announcement, it touted a partnership with Microsoft’s Dynamics enterprise software competes with Salesforce’s core applications. support Immediate service Followed closely.
Salesforce has also revealed plans to acquire smaller startups in recent weeks. predict spring and Tenix.
Salesforce said the Own acquisition will not impact Salesforce’s shareholder return plans and said the deal will be accretive to free cash flow starting in the second year after closing.
In April, data management software maker Informatics Say no In talks The acquisition comes after media reports that Salesforce was interested in acquiring the company for about $10 billion.
“We’re going to look at product organically, but, yes, we’re going to continue to look at product inorganically,” Benioff told analysts on Salesforce’s May earnings call. “But as we promised you, If we are considering a large acquisition, we will make sure it is not dilutive to our customers but is accretive and has the right metrics.”
watch: Salesforce CEO Marc Benioff talks one-on-one with Jim Cramer
