Meet Salesforce’s Newest Acquisition

June 10, 2019 by Chris Lange

Salesforce.com Inc. (NYSE: CRM) shares dipped on Monday after the firm announced that it will acquire Tableau Software Inc. (NYSE: DATA) in an all-stock transaction. The transaction has been approved by the boards of directors of both companies.

Under the terms, each share of Tableau Class A and Class B common stock will be exchanged for 1.103 shares of Salesforce common stock, representing an enterprise value of roughly $15.7 billion (net of cash).

The acquisition of Tableau is expected to be completed during Salesforce’s fiscal third quarter ending October 31, 2019, subject to customary closing conditions.

The transaction is expected to increase Salesforce’s fiscal 2020 total revenue by about $350 million to $400 million. This estimate reflects a fair value adjustment to reduce unearned revenue and unbilled unearned revenue by approximately 30%. Fiscal 2020 revenue is now expected to be in the range of $16.45 billion to $16.65 billion, an increase of 24% to 25% year over year.

Consensus estimates are calling for Salesforce to have $2.69 in earnings per share and $16.1 billion in revenue for the fiscal 2020 full year.

Marc Benioff, board chair and co-chief executive of Salesforce, commented:

We are bringing together the world’s #1 CRM with the #1 analytics platform. Tableau helps people see and understand data, and Salesforce helps people engage and understand customers. It’s truly the best of both worlds for our customers–bringing together two critical platforms that every customer needs to understand their world. I’m thrilled to welcome Adam and his team to Salesforce.

Shares of Salesforce were last seen down about 4.5% at $154.01, in a 52-week range of $113.60 to $167.56. The stock has a consensus price target of $182.18.

Tableau shares were up about 34% to $168.61, with a 52-week range of $92.01 to $173.37.


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