Salesforce.com agreed to buy Slack Technologies for $27.7 billion in cash and stock, giving the corporate software giant a popular workplace-communications platform in one of the biggest technology deals of the year.
The transaction, Salesforce’s largest-ever acquisition, is expected to close by the end of July, the San Francisco-based company said Tuesday in a statement. Slack investors will receive $26.78 for each company share as well as 0.0776 share of Salesforce -- representing a 55 per cent premium to Slack’s price on November 24, the day before reports about deal talks between the companies.
Salesforce chief executive Marc Benioff has orchestrated more than 60 acquisitions in 21 years, taking his company from dot-com era upstart to a titan of cloud computing.
The Slack deal would give Salesforce, the leader in programmes for managing customer relationships, another angle of attack against Microsoft, which has itself become a major force in internet-based computing. Microsoft’s Teams product, which offers a workplace chatroom, automation tools and videoconference hosting, is a top rival to Slack.
“Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world,” Mr Benioff said in the statement.
Stewart Butterfield, Slack’s co-founder and chief executive, will continue to run the business as a Salesforce unit when the deal is completed. He said he is excited to join the company that sparked the cloud revolution.
“The opportunity we see together is massive,” Mr Butterfield said in the statement. “This is the most strategic combination in the history of software, and I can’t wait to get going.”
Salesforce’s shares declined about 4 per cent in extended trading after closing at $241.35. The stock has jumped 48 per cent this year. Slack’s shares were little changed after closing at $43.84. The stock has almost doubled in 2020, with about half of that gain coming since the acquisition talks were reported.
Salesforce, among the first of the fast-growing cloud software companies when it went public in 2004, strives to generate year-over-year revenue increases of more than 25 per cent. Slack, which is expected to increase its sales almost 40 per cent to $877 million this fiscal year, could help that effort. Slack, launched in 2013, went public via a direct listing in 2019. Bloomberg News and other publications reported that companies including Amazon, Microsoft and Alphabet’s Google expressed interest in buying Slack at various times when it was still private.
Mr Benioff for years has turned to acquisitions to keep his product lineup fresh. He has set an annual revenue goal of $35bn for Salesforce by fiscal 2024, compared with $17bn in fiscal 2020. The company bought analytics firm Tableau Software in an all-stock deal valued at $15.3bn last year, which was Salesforce’s biggest acquisition at the time. The year before, in 2018, Mr Benioff took over MuleSoft Inc. for $6.5bn.
Separately, Salesforce projected revenue will grow about 17 per cent in the current period to as much as $5.675bn. That will be the slowest quarter of year-over-year sales growth in 11 years for the software maker, according to data compiled by Bloomberg. Profit, excluding some items, will be 73 to 74 cents in the period ending in January, missing analysts’ projections for 86 cents.
Sales climbed 20 per cent to $5.42bn in the fiscal third quarter, which ended October 31, the company said in a statement. Profit, excluding some items, was $1.74 a share, compared with analysts’ average estimate of 75 cents.
The company also said chief financial officer Mark Hawkins will retire effective January 31, and be replaced by Amy Weaver, currently president and chief legal officer. Mr Hawkins will remain an adviser through October 2021, Salesforce said.
Salesforce ownership will mark a new era for Slack, a tech upstart with the lofty goal of trying to replace the need for business emails. The cloud-software giant may be able to sell Slack’s chatroom product to existing customers around the world, making it even more popular.
In March, Slack said it had reached 12.5 million users who were simultaneously connected on its platform, which has grown more essential while corporate employees work from home during the coronavirus pandemic. Slack has boosted revenue in the midst of Covid-19, but the company’s billings have been underwhelming because of shaky demand from small and mid-sized clients.
Meanwhile, use of Microsoft Teams has jumped during the pandemic, and Slack has taken issue with the company’s business tactics. In July, Slack complained to the European Union that Microsoft had broken antitrust law and should be investigated.
“Microsoft has illegally tied its Teams product into its market-dominant Office productivity suite, force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers,” Slack said in a statement at the time. Microsoft, which integrates its products with Slack, has denied any wrongdoing.
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Low turnout
Two months before the first round on April 10, the appetite of voters for the election is low.
Mathieu Gallard, account manager with Ipsos, which conducted the most recent poll, said current forecasts suggested only two-thirds were "very likely" to vote in the first round, compared with a 78 per cent turnout in the 2017 presidential elections.
"It depends on how interesting the campaign is on their main concerns," he told The National. "Just now, it's hard to say who, between Macron and the candidates of the right, would be most affected by a low turnout."
RESULTS
2pm: Handicap (PA) Dh40,000 (Dirt) 1,000m
Winner: AF Mozhell, Saif Al Balushi (jockey), Khalifa Al Neyadi (trainer)
2.30pm: Maiden (PA) Dh40,000 (D) 2,000m
Winner: Majdi, Szczepan Mazur, Abdallah Al Hammadi.
3pm: Handicap (PA) Dh40,000 (D) 1,700m
Winner: AF Athabeh, Tadhg O’Shea, Ernst Oertel.
3.30pm: Handicap (PA) Dh40,000 (D) 1,700m
Winner: AF Eshaar, Bernardo Pinheiro, Khalifa Al Neyadi
4pm: Gulf Cup presented by Longines Prestige (PA) Dh150,000 (D) 1,700m
Winner: Al Roba’a Al Khali, Al Moatasem Al Balushi, Younis Al Kalbani
4.30pm: Handicap (TB) Dh40,000 (D) 1,200m
Winner: Apolo Kid, Antonio Fresu, Musabah Al Muahiri
UAE currency: the story behind the money in your pockets
A list of the animal rescue organisations in the UAE
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
