Cloud computing giant Salesforce is acquiring workplace chat app Slack, the two companies announced on Tuesday.
Salesforce is paying $27.7 billion for Slack, according to the press release.
“Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce’s common stock on November 30, 2020,” the announcement reads.
Slack has transformed from a fast-rising startup formed as a gaming company in 2009 into a major competitor of Microsoft with more than 12 million daily active users as of October of last year and a market value of close to $25 billion. The company, led by Flickr co-creator Butterfield, started primarily as an email alternative that pitched itself to startups, media companies, and other tech-savvy businesses to better manage interoffice communication.
“Stewart and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it,” said Salesforce CEO Marc Benioff. “This is a match made in heaven. 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. I’m thrilled to welcome Slack to the Salesforce Ohana once the transaction closes.”
Stewart Butterfield, CEO of Slack, said: “Salesforce started the cloud revolution, and two decades later, we are still tapping into all the possibilities it offers to transform the way we work. The opportunity we see together is massive.”
“As software plays a more and more critical role in the performance of every organization, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organizational agility. Personally, I believe this is the most strategic combination in the history of software, and I can’t wait to get going.”
Salesforce, also a major competitor to Microsoft but in the cloud sector, is worth nearly $220 billion and has grown to become one of the largest software companies on the planet, thanks to its customer relationship management software that helps businesses manage sales online.
Both Salesforce and Slack have only become more vital during the coronavirus pandemic as companies worldwide have moved to remote work and moved substantial portions of their businesses online.