Salesforce drops Informatica acquisition due to investor caution
Salesforce is in a tough spot as discussions about an Informatica acquisition hit hurdles.
According to BloombergTalks have stalled as the two companies struggle to reach mutually acceptable terms, according to a source familiar with the matter.
At the same time, investors have expressed concerns about the terms and effectiveness of the proposed acquisition, sending the stock prices of both Salesforce and Informatica into a downward trajectory.
Acquisition of Informatica from Salesforce suspended
Despite initial interest from both sides, negotiations have slowed, with the two companies struggling to agree on price, the unnamed source said.
Informatica’s shares closed at $35.19 on Friday, giving the company a market capitalization of about $10.5 billion, highlighting the substantial stakes involved in the potential deal.
If the acquisition goes through, it would become one of several companies that Salesforce has recently acquired due to its expensive spending spree. The Californian company acquired Slack in 2021 for more than $27 billion, and Tableau in 2019 for more than $15 billion.
Many have been quick to point out the cloud-based software company’s fairly mediocre single-digit growth: The company expects 9% annualized growth for the coming fiscal year, down two percentage points from last year.
The projected 35% revenue increase for Informatica’s Cloud Subscription ARR business could help turn things around for Salesforce if the deal goes through, but how much impact that could have on Salesforce given Informatica’s significantly smaller size overall is unclear. had a major impact on investor expectations. ghosts.
Opinions remain divided as talks between Salesforce and Informatica continue as the two companies battle mutual agreements and investor satisfaction, highlighting the precarious nature of large acquisition deals and the heavy influence of third parties.