Salesforce has struck an $8B billion equity deal on Tuesday, to buy cloud data management firm Informatica. Salesforce’s acquisition of Informatica is acquisition is a major move to push data management platform to sharpen its competitive edge in the fast-growing AI market.
Salesforce is returning to strengthen its AI and data infrastructure capabilities with its merger with Informatica, betting on the big-ticket acquisition after years on the sidelines, driven by scrutiny from activist investors pressing for better profitability.
Salesforce and Informatica deal
The Informatica’s merger with Salesforce announcement comes about a year after it shelved the talks as they failed to reach the deal terms. Also, Informatica denied it was for sale.
Again, the negotiations picked up steam a month back as per reports.
Under the terms of the deal, Salesforce will pay $25 in cash per share for Informatica’s Class A and Class B-1 common stock, adjusting for its prior investment in the company.
As per, Scotiabank analysts the deal with Informatica could help Salesforce catch-up with software rivals as “data management software is now most often sold as part of mega-vendor tool kits”.
Other acquisitions by Salesforce
Salesforce, the business software company has been a prolific dealmaker, buying data analytics firm Tableau Software in 2019 for $15.7 billion in stock, and Slack in 2021 in its biggest deal.
Own Company was acquired by Salesforce for $1.9 billion cash in September 2024, making Informatica the second in few months.
Salesforce acquiring Informatica, its biggest
The data management acquisition is Salesforce’s biggest deal since about $28B acquisition of Slack Technologies in 2021. This
The acquisition of Informatica would help Salesforce expand its data management tools as it doubles down on AI-powered products. This deal would also help Salesforce to tighten control over how business data is managed and used.
Salesforce CEO Marc Benioff said, “Salesforce and Informatica will create the most complete, agent-ready data platform in the industry”. Adding, the power this deal shall have in strengthening its position in the data enterprise market.
Informatica deal details
Founded in 1993, Informatica works with more than 5,000 customers across more than 100 countries. It’s market cap of $7.1B.
Salesforce is paying $25 for each share of Informatica, a premium of about 30% to Informatica’s closing price on May 22.
Stock update
Stock price of Informatica was up 5.8% in afternoon trading at $23.86. Salesforce shares were up 1.78%.
Salesforce expects to close the deal in early next fiscal year starting February through a mix of cash and new debt. The deal is expected to boost its operating margin from the second year after closing.
