Salesforce (CRM) is reportedly in advanced talks to acquire data management software company Informatica (INFA), according to a Wall Street Journal report. The potential acquisition would allow Salesforce to boost its data integration and management capabilities by tapping into Informatica’s product suite.
Yahoo Finance’s Julie Hyman and Josh Lipton break down the details, discussing Salesforce CEO Marc Benioff’s proxy battles regarding M&A deals.
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This post was written by Angel Smith
Video Transcript
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JOSH LIPTON: Time now for the day’s trending tickers as we approach the closing bell here on Wall Street, taking a look at shares of Salesforce. Company reportedly in advanced talks to acquire Informatica. It’s according to the Wall Street Journal, shares are sliding in today’s trade. CEO Marc Benioff, we know he likes to do big deals. Slack, MuleSoft, Tableau now could be ready to do another one. Bloomberg saying Salesforce is pursuing Informatica. Point would be to add CRMs data integration and management capabilities.
Deal could happen within a week potentially. Benioff, remember he had his hands full. With activists, he actually avoided a potential proxy fight with Elliott last year. Got religion. Julie, on cutting costs and boosting profitability and now maybe ready to pull the trigger again on a pretty meaty acquisition.
JULIE HYMAN: Yeah. So a couple of things on this. First of all, the journal which originally reported these two were in talks had said that the deal price was around $38.48. The shares actually of Informatica actually closed on Friday above that level. So the question was, could Benioff convince them to take less than that Friday high close for the stock. So that’s one fly in the ointment. The second is, like you said he just finished this big proxy battle and big activist battle with a bunch of different high powered activists. Who said, we don’t want you to do as much M&A.
He solved that and he’s like, well, can I just sneak in this $11 billion acquisition. I mean, it’s just– it’s sort of confounding. And it looks like that investors are confounded as well. And that’s why the shares are trading down.
JOSH LIPTON: Yeah. On the actual strategy, RBC’s Rishi Jaluria, who we know, Julie. He waded in here too. He was saying to his clients, he’s just mixed on the news. We recognize– he said, listen, on the one hand Salesforce can easily make an argument about data integration and bringing together Informatica, MuleSoft, Tableau. We recognize the difficulty of integrating all these services he says and questioning the necessity of Salesforce owning Informatica versus simply partnering.
