NEW YORK, Nov 25 (Reuters) - Cloud-based software company
Salesforce.com Inc is in talks to acquire workplace
messaging app Slack Technologies Inc as it seeks to
expand its offerings to businesses, people familiar with the
matter said on Wednesday.
Salesforce's bid comes as Slack struggles to fully
capitalize on the switch to remote working during the COVID-19
pandemic in the face of fierce competition from Microsoft Corp's
Teams and other workplace apps
Slack shares ended trading on Tuesday at $29.57, well below
the $42 high they reached on their first day of trading last
year.
Salesforce sees the potential acquisition as a logical
extension of its enterprise offerings, the sources said. The
price it was offering for Slack could not be learned, though one
of the sources said Salesforce would pay cash for the deal,
rather than use its stock as currency.
If the negotiations conclude successfully, a deal could be
announced before Slack reports quarterly earnings on Dec. 9, one
of the sources added.
Neither Slack nor Salesforce responded to requests for
comment.
Slack Technologies 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 talks.
Slack has benefited from companies relying more on
information technology systems to keep their workers connected
during the pandemic.
Its app has been installed about 12.6 million times so far
this year, up approximately 50% from the same period in 2019,
according to analytics firm Sensor Tower.
But the economic fallout of the virus outbreak has forced
Slack to give discount and payment concessions to many of its
customers who have had to make cost cuts.
Seeking to save money, some companies have also been
switching to Teams, which comes with many of Microsoft's office
software packages.
"I think Microsoft Teams has been able to capitalize on the
opportunity better than Slack, partly because they give it away
for free as a bundle," said Rishi Jaluria, an analyst at
research firm DA Davidson and Co.
"Now Slack realizes that they might be able to get greater
penetration as part of a larger company."
Slack's billing growth, a key indicator of future revenue,
slowed in the three months to the end of July.
Salesforce meanwhile has been thriving financially during
the pandemic. It raised its annual revenue forecast in August as
the pandemic spurred demand for its online business software
that supports remote work and commerce.
Salesforce has been beefing up its cloud business through
acquisitions and had spent more than $16 billion last year to
fend off competition from rivals such as Oracle Corp
and German competitor SAP.
(Reporting 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)