Salesforce Inc. (CRM) - Get Report said Monday it has reached an agreement to buy Tableau Software Inc. (DATA) - Get Report in a deal that values the data analytics group at more than $15.7 billion in stock and debt.
Salesforce will purchase Tableau in a deal that gives that company's shareholders 1.103 in Salesforce stock and should immediately increase the combined group's sales by between $300 million and $400 million, the companies said, with a new forecast of between $16.45 billion and $16.65 billion, an increase of around 35% year-over-year. Salesforce's fiscal 2020 earnings will, however, likely be reduced by about 75 basis points, year-on-year, with non-GAAP earnings now pegged in a range of $2.51 to $2.53 per share, down from last week's forecast of $2.88 to $2.90 that followed stronger-than-expected first quarter earnings.
"We are bringing together the world's #1 CRM with the #1 analytics platform. Tableau helps people see and understand data, and Salesforce helps people engage and understand customers," said CEO Marc Benioff. "It's truly the best of both worlds for our customers--bringing together two critical platforms that every customer needs to understand their world. I'm thrilled to welcome Adam and his team to Salesforce."
Tableau shares surged 32% to $165.62 each by later afternoon trading Monday following news of the merger, while Salesforce was marked 6.4% lower at $150.92 each, a move that would trim the stock's year-to-date gain to around 10%.
- Jim Cramer: On the Markets, M&A Monday, and Raytheon's Merger With United
- Behind the Label: How Salesforce Earned Its Cloud King Crown
Tableau will continue to operate under its company brand, and will be run by current CEO Adam Selipsky out of the company's headquarters in Seattle, Washington.
Last month, Tableau reported net losses of $88.9 million, or 2 cents per share on an adjusted basis, on revenue of $282.5 million. Analysts were expecting the company to lose a penny per share on revenue of $287.3 million.
Salesforce, meanwhile, said last Thursday that non-GAAP earnings for the three months ending in April, the company's fiscal first quarter, came in at 93 cents per share, up 25.7% from the same period last year and firmly ahead of the Street consensus forecast of 63 cents.
Group revenues, Salesforce said, rose 24% to $3.74 billion, topping the $3.68 billion estimate, thanks in part to an 11.2% gain for cloud-based revenues, which came in at just under $1.1 billion.