NEW YORK (TheStreet) -- Shares of Salesforce.com (CRM - Get Report) were rising in pre-market trading on Tuesday after the cloud services company signed a definitive agreement late yesterday to acquire Krux, a privately-held marketing data startup, for about $700 million, according to a Krux company statement.
Salesforce.com, based in San Francisco, will fund the deal with about $340 million in cash and the remainder in equity.
Krux is a San Francisco-based company which searches the Internet for data and reports back to companies to help improve marketing and advertising success.
The acquisition will help Salesforce.com's artificial intelligence offerings, the Wall Street Journal reported.
The companies expect the deal to close in the fourth quarter of 2017.
DA Davidson lowered its price target to $80 from $86 on Salesforce.com stock and maintained a "neutral" rating this morning after the announcement.
The firm noted that Salesforce.com's Einstein AI offering will be fed by "billions of new data points" from Krux's service.
But DA Davidson added that the reduced price target is based on its cash flow analysis and the "increase in competitive intensity" from cloud service providers like Oracle (ORCL).
Additionally, JMP Securities maintained a "market perform" rating and $92 price target on shares of Salesforce.com this morning.
"Through the acquisition, Salesforce.com gains a remarkable executive and technologist in Tom Chavez, in our opinion, who was served as Krux's CEO since founding the company in 2010," the firm noted.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "hold" with a ratings score of C.
The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including premium valuation, weak operating cash flow and relatively poor performance when compared with the S&P 500 during the past year.
You can view the full analysis from the report here: CRM