Salesforce Inc. (NYSE:CRM) has backed-off from a deal to take over data management software firm Informatica Inc. (NYSE:INFA) after the two could not agree to a takeover price, as per reports on Sunday. Business software maker, Salesforce and Informatica deal collapses as the two had failed to reach an agreement amid disagreements over the terms of the deal.
The acquisition talks between Salesforce and Informatica were at an advanced stage earlier in April as per reports. If the two sides had agreed on a deal, it would’ve ranked as one of Salesforce’s biggest acquisitions.
Salesforce and Informatica did not immediately respond to requests for comment.
Salesforce Informatica deal
Salesforce had been discussing a price for Informatica in the mid-$30s a share, according to the Wall Street Journal, which reported earlier on Sunday that the talks between the two sides had fizzled. When news of the deal talks first broke on April 12, Informatica’s shares were trading at $38.48.
Informatica’s shares closed at $35.19 on Friday, valuing the Redwood City, California-based company at about $11.2 billion, including debt.
Informatica data-management software firm
Founded in 1993, Informatica offers subscription-based data management services over the cloud and helps automate tasks for more than 5,000 active customers. Informatica’s customers include Unilever and Deloitte, according to the company’s website.
As of April 19, Informatica has a market capital of $12.09 billion. The company more than doubled in value over the past year after it rolled out a slew of artificial intelligence tools across its corporate software products.
Salesforce’s under scrutiny
Salesforce’s dealmaking strategy came under scrutiny in early 2023, when activist investors, including ValueAct Capital and Elliott Management, questioned the company’s strategy and pushed the management for changes.
In response, Salesforce implemented cost-cutting and increased share buybacks. It also disbanded its mergers and acquisitions board committee.
Salesforce acquisitions
Throughout its history, Salesforce has been a prolific acquirer of smaller rivals. In 2019, it bought data analytics platform Tableau Software in an all-stock deal valued at $15.7 billion. A year later, Salesforce agreed to buy workplace messaging app Slack Technologies for nearly $28 billion, its biggest acquisition.
Why Salesforce wanted to acquire Informatica?
Saleforces’s stock was also sitting on a heady 33% jump over the past six months, as the firm incorporated AI into its own products. A takeover of Informatica would have allowed Salesforce to fold Informatica’s offerings into its own suite of products, while also giving Salesforce access to Informatica’s large pool of clients, which include consumer goods giant Unilever PLC (NYSE:UL), major automaker Toyota (NYSE:TM) Motor (TYO:7203) and accounting major Deloitte.
Stock update
Salesforce and Informatica’s stock prices had fallen in response to initial reports of a takeover.
