Cloud-based software company Salesforce.com is currently in discussions to acquire workplace messaging app Slack Technologies since it seeks to expand its own offerings to businesses, individuals knowledgeable about the matter has said.
Salesforce’s bid comes as Slack struggles to fully capitalize on the switch to remote working during the COVID-19 pandemic at the face of fierce opposition from Microsoft Corp’s Teams and other office apps
Slack shares finished trading Tuesday at $29.57, well below the $42 high they attained on their first day of trading this past year.
Salesforce Inc sees the potential acquisition as a logical expansion of its business offerings, the sources said. The price it was offering for Slack could not be learned, though one of those sources said Salesforce would pay cash for the deal, rather than simply use its stock as currency.
If the negotiations conclude successfully, a deal could be announced before Slack accounts annual earnings on Dec. 9, one of the sources added.
Neither Slack nor Salesforce reacted to requests for comment.
Slack Technologies Inc shares jumped 24% to $36.58, giving the company a market capitalization of $21 billion, while Salesforce fell 2.7% after the Wall Street Journal first reported that the two companies had held deal discussions.
Slack has benefited from companies relying on information technology systems to keep their employees connected during the pandemic.
Its app has been set up about 12.6 million occasions so far this year, up approximately 50% from precisely the same period in 2019, according to analytics firm Sensor Tower.
But the economic fallout of this virus outbreak has forced Slack to give payment and discount concessions to many of its customers who have needed to make cost cuts.
Seeking to save money, some firms also have been shifting to Teams, which includes many of Microsoft’s office software packages.
“Now Slack realizes that they might be able to get greater penetration as part of a larger company.”
Slack’s charging growth, a key indicator of future revenue, slowed in the three months to the end of July.
Salesforce meanwhile continues to be thriving financially during the pandemic. It raised its annual revenue forecast in August since the pandemic spurred demand for its internet small business software that supports distant work and trade.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Greg Roumeliotis and Krystal Hu in New York. Additional reporting by Subrat Patnaik and Eva Mathews in Bengaluru. Editing by Arun Koyyur and Jan Harvey.
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