What Salesforce’s $27.7 Billion Acquisition of Slack Means for the Office

Salesforce will take over the reigning chat tool for the pandemic workplace.

The software company announced today that it plans to sell Slack, the 11-year-old collaboration software maker co-founded by Stewart Butterfield and Cal Henderson, in a $ 27.7 billion cash and stock transaction to take over. The deal marks the largest purchase in Saleforce history and is among the top 10 largest acquisitions in 2020 – topped by multi-billion dollar deals such as S&P Global’s purchase of IHS Markit for $ 44 billion and the purchase of Xilinx valued at $ 35 billion through AMD.

Co-founder and CEO Marc Benioff said in a statement that the deal was a “match made in heaven” and emphasized Slack’s importance for the future of remote working. “Together, Salesforce and Slack will shape the future of enterprise software and change the way everyone works in the fully digital world, from anywhere. I am delighted to welcome Slack to Salesforce Ohana after the transaction is complete,” he wrote. Benioff uses a term from the Hawaiian culture that the company uses to refer to its internal support system.

Should the deal be approved by shareholders as well as the Federal Trade Commission and the US Department of Justice, Slack’s co-founders will make a sizeable profit. CEO Stewart Butterfield owns 8 percent of the company and co-founder Cal Henderson owns 3 percent. At a valuation of $ 27.7 billion, that would bring Butterfield’s stake to $ 2.2 billion and Henderson’s stake to $ 831 million.

The founders are also expected to stay with the United Company, which a statement says will be passed Slack’s interface for Salesforce software. In other words, Salesforce looks more like Slack than the other way around. Saleforce’s latest chat tool at work, Chatter, allows users to text each other and share files, similar to Slack. However, Chatter is only available to Salesforce users. Using Slack as the Salesforce user interface could open it up to an even larger number of companies.

Although the exact details of the integration have not yet been released, the company announced that both Slack and Salesforce users will have access to the other company’s apps ecosystem. The Slack platform can be integrated into more than 2,400 apps such as Google Calendar or ZenDesk selected by companies. Salesforce has a library of enterprise applications to help you with everything from planning to creating graphics.

Slack would be aligned with Salesforce Customer 360, the customer relationship management (CRM) software used by sales and customer service teams in companies around the world. Currently, Salesforce Customer 360 is the most widely used CRM tool of its kind.

The deal puts pressure on Microsoft, Salesforce’s competitor, which has its own remote work chat tool, Microsoft Teams. Before Slack, Salesforce acquired two companies that also compete directly with Microsoft’s products. Tableau, a data visualization platform; and Mulesoft, a back-end software program that connects data.

The transaction is expected to close by the end of Salesforce’s second quarter in 2022, after the required approvals are received.

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