Salesforce continues to build toward becoming the next mega-company, with its deal to buy Slack positioned as the latest example.
The move is expected to be announced Tuesday after markets close, sources told CNBC’s David Faber, and is expected to be about half cash and half stock.
Shares of Slack rose about 4% Monday on the news. Salesforce shares were down more than 3% at around $242 by midday Tuesday.
Slack is a collaboration network for business. According to its website: “From Fortune 100 companies to corner markets, millions of people around the world use Slack to connect their teams, unify their systems, and drive their business forward.”
With a market cap growing to more than $20 billion following the Wall Street Journal’s original report of the plans for a deal, Slack had risen to more than $24 billion as of Monday morning.
Salesforce, frequently at odds with Microsoft in a growing tech battle, was set to report quarterly earnings on Tuesday. The company acquired MuleSoft for $6.5 billion in 2018 and spent more than twice that amount on Tableau, acquiring the data visualization company for $15.3 billion last year.
“This would be a game-changer move for Benioff and Co. to further build out its collaboration engine and product footprint as cloud spending ramps across the enterprise,” Wedbush Securities’ Dan Ives told CNBC, referring to Salesforce CEO Marc Benioff.
Slack’s share price set a record intraday high of almost $44 Tuesday, turning around a relatively slow 2020.
In a strong year for “stay-at-home” tech stocks such as Zoom and Amazon, Slack hasn’t prospered at those levels. After posting quarterly earnings growth of 50% year-over-year in September, the stock fell nearly 20%, largely owing to comparisons.
Zoom’s revenue reportedly jumped 355% throughout the pandemic.