Salesforce.com Signs Definitive Agreement To Acquire Buddy Media

With 8 of the top 10 advertisers as clients, Buddy Media is the clear leader in social media marketing. The company currently has nearly 1,000 customers, including major global brands like Ford, Hewlett Packard, L'Oreal, Mattel and the world's largest marketing agency groups such as IPG (Interpublic Group), Omnicom, Publicis and WPP. Buddy Media is the only company to be named a charter Facebook Preferred Marketing Developer, Google Engagement Solutions partner and LinkedIn Certified Developer.

The Salesforce Marketing Cloud – Transforming Marketing for the Social Era

The marketing industry is undergoing the biggest transformation it's seen in 60 years, and it's all being driven by the unprecedented growth of social networks. Today's leading brands are looking to completely transform their traditional marketing strategies for the social era. Industry analysts predict that CMOs will surpass CIOs in spend on technology within the next five years(1) and that social advertising will be the largest growth area of online advertising by 2013(2).

By combining Buddy Media, the world's leading social media marketing platform, with Salesforce Radian6, the world's leading social media listening platform, salesforce.com will deliver the first comprehensive Marketing Cloud that will allow customers to listen, engage, gain insight, publish, advertise and measure social marketing programs. With the Salesforce Marketing Cloud, CMOs will be empowered to manage the entire social marketing lifecycle.

Financial Details of Proposed Buddy Media Acquisition

Salesforce.com will acquire Buddy Media for approximately $467 million in cash and $184 million in salesforce.com common stock, and $38 million in vested salesforce.com options and restricted stock units.  All of Buddy Media's vested and unvested options, restricted stock and restricted stock units held by continuing employees will be assumed and converted into options, restricted stock and restricted stock units of salesforce.com. The acquisition has been approved by Buddy Media's board of directors and stockholders and is expected to close during the third quarter of salesforce.com's fiscal 2013, ending October 31, 2012, subject to customary closing conditions, including the expiration or early termination of the waiting period under the Hart–Scott–Rodino Antitrust Improvements Act of 1976, as amended.

Additional details and information about the terms and conditions of the acquisition will be available in a current report on Form 8-K to be filed by salesforce.com with the Securities and Exchange Commission. Financial Impact of Proposed Buddy Media Acquisition

Q2 FY13:  Given an expected fiscal third quarter close date, this transaction is not expected to have any material impact to salesforce.com's fiscal second quarter FY13 revenue or EPS results, previously guided on May 17, 2012.

Q3 FY13:  Salesforce.com expects to provide revenue and EPS guidance for its fiscal third quarter FY13, including the effects of this transaction, when it announces results for its second fiscal quarter, ended July 31, 2012.  

FY13: The acquisition is expected to increase revenues by approximately $20 million to $25 million, and to reduce non-GAAP EPS by approximately $0.14 to $0.15 in the second half of the year ending January 31, 2013 depending on the final acquisition date. To reflect the impact of this acquisition, the company is updating the full-year guidance it provided on May 17, 2012. Specifically, the company now expects FY13 revenue in the range of approximately $2.990 billion to $3.025 billion, and FY13 non-GAAP EPS in the range of approximately $1.45 to $1.49. 

Non-GAAP EPS excludes the impact of the following non-cash items: stock-based compensation, amortization of purchased intangibles from acquisitions, and the amortization of debt discount on the company's convertible senior notes, as well as the tax consequences associated with these items. The financial impact of the acquisition on a GAAP basis cannot be estimated until the allocation of the purchase price is completed following the closing of the acquisition. However, salesforce.com currently expects that the dilutive impact of the acquisition to EPS will be significantly greater on a GAAP basis than a non-GAAP basis.

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