Informatica And Salesforce Are In Advanced Talks About a Merger

(CTN News) – In the latest sign of increased deal-making in the technology industry, Salesforce is in advanced negotiations to acquire Informatica, a person familiar with the matter said on Friday.

According to the source, who requested anonymity due to the confidentiality of the discussions, a deal could be announced in the near future.

As reported by the Wall Street Journal, which first reported Salesforce’s discussions with Informatica, the price under discussion is below Informatica’s current share price of $38.48.

Informatica and Salesforce did not respond to requests for comment immediately.

A representative of Permira, which holds a controlling stake of over 75% in Informatica along with the Canadian Pension Plan Investment Board (CPPIB), declined to comment. No comment could be obtained from the CPPIB.

Informatica was founded in 1993 and provides subscription-based cloud-based data management services as well as automated tasks for over 5,000 customers worldwide.

The company is based in Redwood City, California, and its clients include Unilever and Deloitte.

It is estimated that Informatica is worth about $11.35 billion based on the gains it has experienced so far this year, a rise of nearly 43%.

Permira and CPPIB were part of a consortium that acquired the company for approximately $5.3 billion in 2015.

It was six years later that Permira and CPPIB took Informatica public again, and its shares were listed on the New York Stock Exchange.

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Assuming the deal goes through, it will be Salesforce’s largest acquisition since it acquired the workplace messaging app Slack Technologies for almost $28 billion in 2020.

A number of activist investors, such as ValueAct Capital and Elliott Management, questioned Salesforce’s dealmaking strategy in early 2023 and urged the company’s management to change its strategy.

Salesforce responded by implementing cost-cutting measures and increasing share buybacks. Moreover, the committee on mergers and acquisitions was disbanded.

Salesforce has been active in the acquisition market. A $15.7 billion all-stock acquisition of data analytics platform Tableau Software took place in 2019.

A number of large deals have been signed as part of the current enthusiasm for artificial intelligence that is sweeping through the technology sector.

During the first quarter, Dealogic reported a 42% increase in mergers and acquisitions in the technology sector over the same period last year, totaling approximately $154 billion.

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