The $15.7 billion, all-stock transaction was heralded by the CEOs of both firms as a match made in heaven as Salesforce deepens its reach into data analytics. Salesforce shares were down 4.7% on the news, while shares of Tableau surged 34.6%.
"It's hard to get the stars to align; we were fortunate that we got there," said Salesforce co-CEO Marc Benioff on a call with investors on Monday morning, in response to a question about why now was the right time to seal the deal. "When I talk to some of our largest customers, we're talking about Salesforce, then they start talking about how they're using Tableau. [I thought] wow, if this was more deeply integrated as one movement, we could satisfy a great customer need."
Here are three takeaways from Salesforce's investor call today discussing the purchase of Tableau, a company that Benioff dubbed a "brother from another mother."
1. Think Mulesoft
Benioff and Salesforce's chief product officer, Bret Taylor, likened the acquisition to that of Mulesoft, which Salesforce bought in 2018 in a deal worth about $6.5 billion. The executives pointed out that much like Mulesoft, Tableau's software draws data from multiple sources: Amazon (AMZN) - Get Report , Microsoft (MSFT) - Get Report , Workday (WDAY) - Get Report and ServiceNow (NOW) - Get Report , among others. Benioff said that Salesforce doesn't get "draconian" in cutting off such data pipelines: "We always maintain a beginners mind...we've not only maintained the Mulesoft acquisition, we've added to it."
2. A 'Broad Brush'
Tableau has 86,000 customers, which include big names like Verizon
, Charles Schwab
. The deal, which is set to close in the fiscal third quarter, will add between $350 million and $400 million to Salesforce's overall top line next year, Salesforce said in a press release. For evidence of the breadth of Tableau's customer touch points, calling it a "broad brush," Benioff urged investors to check out Tableau's
of data visualizations.
3. Earnings Will Dip, With Better Days Ahead
Salesforce lowered its profit forecast for fiscal 2020 owing to the deal, estimating a decrease of 37 to 39 cents non-GAAP diluted EPS in fiscal 2020, resulting in profits on $2.51 to $2.53. However, on the call with investors, Salesforce executives offered reassurance that the company is committed to growing profits over time.