Salesforce has agreed to acquire data visualization platform provider Tableau in an all-stock transaction valued at $15.7 billion, making it the largest acquisition in the company’s history and combining one of the biggest CRM players with a major big data analytics platform.
The purchase is a clear indicator that Salesforce is seeking to offer more data insights to its clients, with a company statement placing a heavy emphasis on “driving digital transformation” across businesses in. With today’s retailers continually having to adapt to changing consumer preferences and developing a sharper focus on understanding data from all points of the shopper journey, Salesforce is looking to marry the concepts of CRM and big data even further.
Specifically, Tableau’s analytics and visualization capabilities are positioned to strengthen Salesforce Customer 360 and enable users to improve the customer experience by making smarter, more data-driven decisions to accelerate innovation.
Salesforce has a total of more than 150,000 clients, while Tableau works with 86,000 organizations. Tableau will operate independently under the Tableau brand, will remain headquartered in Seattle and will continue to be led by CEO Adam Selipsky and the current leadership team.
The acquisition comes a mere four days after Google acquired one of Tableau’s major competitors, Looker, for $2.6 billion, in order to add its BI software to Google Cloud. The deal also escalates the competition between Salesforce and Microsoft, which competes with Tableau through its Power BI data visualization and BI technology. Microsoft already competes heavily with Salesforce’s core CRM business with its Microsoft Dynamics customer relationship management technology.
In a press and analyst call, Salesforce CEO Marc Benioff revealed that Seattle would the official second headquarters of the San Francisco-based Salesforce. This move puts the company into the backyards of Microsoft and Amazon.
The transaction has been approved by the boards of directors of both companies and is expected to be completed during Salesforce’s fiscal Q3, ending October 31, 2019. The deal is more than double the $6.5 billion Salesforce paid for application integration platform MuleSoft last year.
As part of the all-stock deal, each Tableau shareholder will get 1.103 Salesforce shares, valuing the offer at $177.88 per share, representing a premium of 42% to Tableau’s Friday closing price. The transaction is expected to increase Salesforce’s full year total revenue by approximately $350 to $400 million.
The acquisition comes on the heels of a very successful Q1 for Salesforce. The giant solution provider had revenue of $3.74 billion during the quarter, an increase of 24% year-over-year, and generated $1.97 billion in cash alone, a 34% year-over-year jump.
Tableau reported $1.16 billion in revenue for 2018 with a net loss of $77 million, compared with $877 million in revenue and a $185.6 million net loss in 2017.