(Bloomberg) — Salesforce Inc.’s Marc Benioff is aiming for one of the company’s biggest deals ever after fending off activist investors who criticize his reliance on takeovers.
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This time, Benioff is targeting Informatica Inc. to expand Salesforce’s data integration and management capabilities, according to people familiar with the matter.
The two companies have been in talks and could reach an agreement within a week, said the people, who spoke on condition of anonymity because the discussions are private. A final agreement could take longer or the talks could still end without an agreement, they added.
A Salesforce spokesperson said the company does not comment on “rumors and speculation.” Informatica could not be reached for comment. The Wall Street Journal had previously reported on the discussions.
Informatica is competing with Salesforce’s current third-largest acquisition, MuleSoft, Bloomberg Intelligence’s Sunil Rajgopal wrote in a note. The deal could spur further consolidation in the software-as-a-service industry and bring regulatory scrutiny, he added.
Benioff, Salesforce’s chief executive officer, has struggled with activist hedge funds that are pushing the company to take tougher action. After a series of strategic changes and a rise in its stock price, Salesforce averted a potential proxy dispute with activist investor Elliott Investment Management last year.
Redwood City, Calif.-based Informatica had a market value of about $11.4 billion as of Friday’s close in New York. Shares are up 36% this year to $38.48. The company, which helps customers manage their data in the cloud, forecast in February that fiscal year revenue would rise about 6% to $1.7 billion.
San Francisco-based Salesforce cut costs and improved profitability last year. Now the focus is on revenue growth, which has slowed as companies curb spending on software.
According to data compiled by Bloomberg, Informatica would be the company’s third or perhaps second-largest acquisition among 117 completed and pending deals. Salesforce’s largest acquisition – a purchase of business communications platform Slack Technologies for around $27 billion – was completed in 2021.
If the Informatica deal goes through at a significant premium to the current share price, the amount could rival Salesforce’s $14 billion purchase of Tableau Software in 2019, according to the data. Including debt, Informatica has an enterprise value of more than $12 billion, the data shows.
Salesforce said in 2018 that its 2018 acquisition of MuleSoft represented an enterprise value of $6.5 billion.
Informatica was taken private in 2015 by private equity firm Permira and the Canada Pension Plan Investment Board in a $5.3 billion transaction. In 2021, they took the company public again, with shares priced at $29 each. Two months later, the stock peaked at nearly $39 before falling to nearly $14 last year.
Permira remains the company’s largest shareholder, with nearly 47% of Informatica’s shares, according to Bloomberg data. CPPIB owns about 29% of the shares.
(Updates with participation from Permira and CPPIB Informatica in last paragraph.)
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