Technology giant Salesforce is reportedly in advanced talks to acquire Informatica, according to an anonymous source. The potential deal, which could be announced soon, comes as part of a growing trend of deal-making in the technology industry. The price being discussed is said to be below Informatica’s current share price of $38.48. Both Informatica and Salesforce have not yet commented on the matter.
Informatica, founded in 1993, offers subscription-based cloud-based data management services and automated tasks to over 5,000 customers globally. The company, based in Redwood City, California, counts Unilever and Deloitte among its clients. Its value is estimated at around $11.35 billion, with a growth of nearly 43% this year.
Permira and the Canadian Pension Plan Investment Board (CPPIB) hold a controlling stake of over 75% in Informatica. However, they have declined to comment on the potential acquisition. In 2015, Permira and CPPIB led a consortium that acquired Informatica for approximately $5.3 billion. Six years later, the company went public again with shares listed on the New York Stock Exchange.
If the deal between Salesforce and Informatica goes through, it will be Salesforce’s largest acquisition since its purchase of Slack Technologies for almost $28 billion in 2020. This follows criticisms from activist investors like ValueAct Capital and Elliott Management who questioned Salesforce’s dealmaking strategy in early 2023. They called for a change in the company’s approach.
In response, Salesforce implemented cost-cutting measures and increased share buybacks. Additionally, the committee on mergers and acquisitions was disbanded. Despite this scrutiny, Salesforce has remained active in the acquisition market. In 2019, it completed a $15.7 billion all-stock acquisition of data analytics platform Tableau Software.
The technology sector has seen a surge in mergers and acquisitions, driven by the growing interest in artificial intelligence (AI). During the first quarter of this year, there was a 42% increase in tech sector deals compared to the same period last year. The total value of these deals amounted to approximately $154 billion, as reported by Dealogic.
In conclusion, the potential acquisition of Informatica by Salesforce reflects the ongoing trend of deal-making in the technology industry. Salesforce’s previous acquisition of Slack Technologies and its interest in Informatica demonstrate its commitment to expanding its portfolio and strengthening its position in the market. The surge in mergers and acquisitions in the tech sector further highlights the current enthusiasm for AI and its potential impact on the industry.