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Rumour has it Salesforce is entertaining acquisition offers

Rumour has it Salesforce is entertaining acquisition offers

Cloud heavyweight Salesforce may be working with financial advisors and fielding acquisition inquiries, according to Bloomberg. The biz paper added that there is no certainty any deal will materialise.

It isn’t clear whether the inquiries are coming from a direct rival – purportedly with enough market cap and clout to takeover Salesforce (i.e. Oracle, SAP, Microsoft, or possibly even IBM), or a large systems integrator, or a bank or private equity firm; given Salesforce’s current stock price (it jumped over 11 per cent after acquisition rumours began circulating) its market cap sits just under $50bn which, given most acquisitions are priced at a premium, could put a final tab closer to at least $60bn.

Salesforce spokespeople told BCN the company does not comment on rumours and speculation.

If the rumours are true the potential suitor wouldn’t likely suffer much disappointment. Salesforce recently posted revenues for the quarter ending January 31, 2015 of $1.44bn, a 26 per cent year on year increase with annual revenues reaching $5bn.

The CRM giant, now the sixth largest software company in the world according to Salesforce chief executive Marc Benioff, is projecting full year revenues for fiscal 2016 to grow between 20 and 21 per cent to $6.475bn and $6.52bn.

It’s had some success at positioning itself well for trends that are clearly on the up – platform-as-a-service; cloud marketing automation; the Internet of Things and wearables.

It’s also not clear how such an acquisition would benefit Salesforce and it’s shareholders.

“What’s really unclear is how a company like Salesforce would benefit from being gobbled up by a larger player, particularly in terms of organic growth – which would likely slow following such a buy,” said Gary Barnett, chief software analyst at Ovum.

“The other thing to consider is, an acquisition of this size by one of the few that could buy it out would almost certainly signal relatively low confidence in the suitor’s own offerings in CRM. Would one of Salesforce’s big rivals in this space really have chutzpah to do that?

All of this is just speculation of course. Nevertheless, if Facebook’s eye-watering $19bn acquisition of WhatsApp was enough to make you shudder, a $60bn+ acquisition of Salesforce would surely leave you a bit stunned to say the least.

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