Salesforce announced on Tuesday that it would acquire data management platform Informatica for approximately $8 billion, marking its return to big-ticket mergers and acquisitions after years of staying on the sidelines. The acquisition is a strategic move to strengthen Salesforce’s competitive position in the growing artificial intelligence (AI) market, fueled by increasing pressure from activist investors seeking better profitability.
Return to M&A and Expansion in AI
Salesforce’s decision to purchase Informatica comes after the companies failed to agree on terms during previous deal talks last year. The purchase is Salesforce’s largest acquisition since its nearly $28 billion purchase of Slack Technologies in 2021. By acquiring Informatica, Salesforce aims to enhance its data management tools, which are crucial for expanding its AI-powered products. The deal also gives Salesforce greater control over how business data is managed, which is essential for the company’s push to embed generative AI into its products.
CEO Marc Benioff’s Vision for the Future
Salesforce CEO Marc Benioff emphasized the significance of the acquisition, stating, “Salesforce and Informatica will create the most complete, agent-ready data platform in the industry.” He highlighted that this deal would strengthen Salesforce’s position in the data enterprise market, which is valued at over $150 billion. The acquisition aligns with Salesforce’s broader vision of offering AI-powered business solutions, including AI agents that can manage routine tasks autonomously for businesses in sectors like recruitment and customer service.
Terms of the Deal and Market Response
Salesforce is offering $25 per share for Informatica, a premium of about 30% over Informatica’s closing price on May 22, the day before news of the renewed talks emerged. Informatica’s shares rose by 5.8% in premarket trading, while Salesforce shares were up 1.2%. The deal, expected to close in early next fiscal year starting in February, will be financed through a combination of cash and new debt. Salesforce anticipates that the acquisition will help improve its operating margin from the second year after closing.
Strategic Positioning Against Software Rivals
Analysts from Scotiabank noted that the acquisition could help Salesforce compete more effectively with other software giants, as data management software is now often integrated into “mega-vendor tool kits.” Salesforce’s acquisition history includes buying data analytics firm Tableau Software for $15.7 billion in 2019 and the Slack deal in 2021, both of which drew attention from activist investors in 2023. These investors, including ValueAct Capital and Elliott Management, have pressured Salesforce to improve profitability, adding urgency to the company’s recent M&A activity.
