(Bloomberg) — Marc Benioff of Salesforce Inc. follows what could be one of the company’s biggest deals ever after fending off activist investors who criticized its reliance on acquisitions.
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This time, Benioff is targeting Informatica Inc., according to people familiar with the matter, in a move that would add to Salesforce’s data integration and management capabilities.
The two companies were in talks and could reach a deal within a week, said the people, who spoke on condition of anonymity because the talks were private. A final agreement could take longer than that, or negotiations could still end without one, they added.
A Salesforce spokesperson said the company does not comment on “rumors and speculation.” Informatica was not available for comment. The talks were previously reported by the Wall Street Journal.
Informatica is competing with Salesforce’s current third-largest acquisition, MuleSoft, Bloomberg Intelligence’s Sunil Rajgopal wrote in a note. The deal could spur further consolidation in the software-as-a-service industry and attract regulatory scrutiny, he added.
Salesforce CEO Benioff is battling activist hedge funds that are pressuring the company to run a tighter ship. Salesforce avoided a potential proxy fight with activist investor Elliott Investment Management last year after a series of strategic changes and a rally in its stock price.
Informatica, based in Redwood City, California, had a market value of about $11.4 billion at Friday’s close in New York. Shares have jumped 36% this year to $38.48. The company, which helps customers manage their data in the cloud, projected in February that revenue for the fiscal year would increase about 6% to $1.7 billion.
San Francisco-based Salesforce has cut costs and improved profitability over the past year. Now the focus is on sales growth, which has slowed as corporations rein in their spending on software.
According to data compiled by Bloomberg, Informatica would be the company’s third or possibly second largest acquisition of 117 completed and pending deals. Salesforce’s biggest acquisition — the takeover of enterprise communications platform Slack Technologies for about $27 billion — is set to close in 2021.
If the Informatica deal goes through at a significant premium to the stock’s current price, the amount could rival Salesforce’s $14 billion purchase of Tableau Software in 2019, according to the filing. Including debt, Informatica has an enterprise value of more than $12 billion, the data show.
In 2018, Salesforce said its acquisition of MuleSoft in 2018 represented an enterprise value of $6.5 billion.
Informatica was privatized in 2015 by private equity firm Permira and the Canada Pension Plan Investment Board in a $5.3 billion transaction. They took the company public again in 2021 with a share price of $29 apiece. Shares peaked at nearly $39 two months later before falling to near $14 last year.
Permira, with nearly 47% of Informatica’s shares, remains the company’s largest shareholder, according to data compiled by Bloomberg. CPPIB owns about 29% of the shares.
(Updates with Permir, CPPIB Informatica puts in last paragraph.)
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