Salesforce has agreed to pay $15.7bn for Tableau Software, in the biggest deal to date for the highly acquisitive cloud software group run by Marc Benioff.
Salesforce said on Monday it would buy Tableau, which makes data analytics software that turns raw data into visualisations, in an all-share deal. The valuation is net of cash.
Salesforce has bought dozens of companies since it was founded in 1999 by Mr Benioff, a former Oracle executive. Last year, it paid $6.8bn for Mulesoft, a data integration platform.
Mr Benioff has attracted attention for aggressive acquisitions, even mulling a bid for Twitter. Outside Salesforce, he and his wife bought Time Magazine for $190m last year.
Salesforce’s move comes at a time when the San Francisco-based cloud computing company has been forced to ramp up investment because of mounting competition from Oracle, Microsoft and other large rivals.
The deal will help Salesforce bolster its growing dominance in managing the data, information and analytics of its blue-chip customers, an industry that it expects will be worth nearly $2tn by 2020.
The acquisition is just the latest multi billion-dollar deal in the enterprise software market, after IBM paid $34bn for Red Hat and SAP bought Qualtrics for $8bn late last year. Just last week, Google spent $2.6bn just last week on Looker, a younger rival in data analytics.
Tableau, which was born on the campus of Stanford University, has more than 86,000 customers, including telecoms group Verizon, US airline Southwest and streaming video service Netflix. The company’s products allow organisations to visualise big data in chart or map form without writing any code.
Salesforce said it expected the deal would bolster its revenues in fiscal 2020 by as much as $400m. Tableau last year reported a loss of $77m on sales of nearly $1.2bn.
“Tableau helps people see and understand data, and Salesforce helps people engage and understand customers,” said Mr Benioff. “It’s truly the best of both worlds for our customers — bringing together two critical platforms that every customer needs to understand their world.”
The company said it would give class A and B stockholders of Tableau 1.103 shares of Salesforce, worth $177.88 apiece based on the closing share price of Salesforce on Friday.
Shares of Salesforce fell 4 per cent to $154.15 in pre-market trading on Monday. Tableau rose more than 30 per cent to $168.42.
Once the deal is completed, Tableau will continue to operate independently from its Seattle-based headquarters under the leadership of its existing chief executive Adam Selipsky. The transaction is expected to close by the end of October.
The boards of both companies have approved the transaction. As part of the all-stock deal, Salesforce will offer to buy all outstanding shares of Tableau. The three founders of Tableau — Christian Chabot, Patrick Hanrahan and Christopher Stolte — have agreed to sell their shares as part of the deal.
“Tableau is widely viewed as the gold standard in the next generation [business intelligence]/visualisation market and has driven share gains against legacy [business intelligence] vendors,” said Tyler Radke, an analyst at Citi who follows the stock.
Bank of America provided financial advice to Salesforce, while law firm Wachtell, Lipton, Rosen & Katz and Morrison & Foerster provided legal counsel. Goldman Sachs and law firm Cooley advised Tableau.
