![]() Shares of Microsoft, which competes with Slack through its Teams offering, also dipped slightly on the report. ![]() to further build out its collaboration engine and product footprint as cloud spending ramps across the enterprise," Wedbush Securities' Dan Ives told CNBC, referring to Salesforce CEO Marc Benioff. "This would be a game changer move for Benioff & Co. It would rank among IBM 's $34 billion purchase of Red Hat in 2019, Microsoft's $27 billion purchase of LinkedIn in 2016 and Facebook 's $19 billion purchase of WhatsApp in 2014. The acquisition announced Tuesday is by far the largest in the 21-year history of Salesforce. Slack would be one of the biggest software deals ever for the industry. The following year it spent more than twice that amount on Tableau, acquiring the data visualization company for $15.3 billion. It acquired MuleSoft for $6.5 billion in 2018, the company's biggest deal ever at the time, to help connect cloud applications. Salesforce has been on an acquisition spree, taking advantage of its market cap growth in recent years to buy growing companies. Slack's market cap ballooned to more than $20 billion following the WSJ's original report. Given the risks of the deal and Salesforce’s valuation of over $200 billion, analysts have suggested that their investors root for an antitrust review to prevent the deal.It's unclear how much the deal would be worth. Further, if Salesforce were to affect Slack’s internal operations through the acquisition, some existing customers may be turned away, as many customers now enjoy Slack for their simplicity and neutrality. This is concerning for Salesforce, who would be giving up nearly 13% of their market value for the acquisition based on Slack’s EV/Sales multiple seen in Figure 2. ![]() ![]() Since Slack is a SaaS valued at multiples of revenue instead of profits, their growth forecast faces immense pressure on its ability to materialize as earnings. They have not turned a profit since their initial public offering last year. Furthermore, Slack’s growth should be a risk for Salesforce. A much better suited one could argue could be Google or Amazon as they could integrate Slack into their platforms, but that would be unlikely due to antitrust regulations. ![]() On the other hand, Slack could be a distraction for Salesforce management and could therefore not be believed to be the best owner for Slack. ![]()
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