Salesforce Acquires Slack for $27.7 Billion

Reports of Customer Relationship Management (CRM) platform Salesforce in talks to acquire popular workforce chat platform Slack started circulating last week and gladly today the deal has been made official burying all sorts of speculation and curiosity over this issue, after Salesforce on Tuesday put in the public domain saying that it would acquire Slack for $27.7 billion.

Salesforce CEO Marc Benioff said in a statement, referring to Slack CEO and co-founder Stewart Butterfield.

“Stewart and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it. 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.”

Work practices may never return to pre-pandemic norms. Or at least that’s the premise behind moves like the one Salesforce is making, with companies hoping to cash in on the shift by assembling a suite of services to make remote working easier.

Slack had a market capitalization of about $17 billion before news of the potential deal broke, and it’s now worth around $23 billion. Until the recent pop, it had recorded relatively muted growth in its share price, perhaps because its videoconferencing tools have lagged rivals like Zoom and Microsoft.

Who’s next? Many software companies are riding high with surging stock prices, sitting on large cash piles and able to tap more capital easily if they need to.

In addition to Salesforce, bankers say potential buyers include Adobe (which bought Workfront earlier this month), Twilio (purchaser of Segment and Sendgrid) and ServiceNow. Potential targets include Airtable, Asana, Box, DocuSign, Dropbox and Smartsheet. These deals won’t be cheap, but as the shares of buyers rise in tandem with targets, that may simply mean more stock-for-stock deals.

Microsoft is the elephant in the (virtual) room. The computing giant’s Office software is already installed on most workplace computers, which makes it easy to integrate its Slack-like collaboration tool, Teams. (Slack contends in an antitrust suit against Microsoft in Europe that its bundling of Teams with Office is anticompetitive.)

RELATED READING: SLACK AND AMAZON PARTNERSHIP TO CHALLENGE MICROSOFT TEAMS DOMINANCE

Microsoft has been acquisitive throughout the pandemic, trying to scoop up TikTok and announcing a deal to buy the gaming company Zenimax Media. It may face more regulatory scrutiny than rivals, but it can certainly afford plenty more purchases. It’s sitting on roughly $136 billion in cash and it is one of the few companies with a AAA credit rating.