Wednesday 26 June 2019

Salesforce in record deal for big-data firm Tableau

High hopes: Finance Minister Paschal Donohoe, Salesforce CFO Mark Hawkins, Taoiseach Leo Varadkar and Salesforce executive VP, real estate, Elizabeth Pinkham at the Salesforce Tower launch in Dublin in January
High hopes: Finance Minister Paschal Donohoe, Salesforce CFO Mark Hawkins, Taoiseach Leo Varadkar and Salesforce executive VP, real estate, Elizabeth Pinkham at the Salesforce Tower launch in Dublin in January

Arjun Panchadar

Salesforce.com has agreed a deal to buy big data firm Tableau Software for $15.3bn (€13.5bn), marking the biggest acquisition in the company's history as it looks to offer more data insights to its clients.

Seattle-based Tableau has more than 86,000 customers, including tech heavyweights Verizon and Netflix.

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It has had an Irish operation, in Dublin, since 2012 with around 100 staff and sales of more than €200m a year.

Salesforce has more than 1,100 staff in Ireland, where its operations had turnover last year of €971m.

As part of the all-stock deal, Tableau shareholders will get 1.103 Salesforce shares, valuing the offer at $177.88 per share, representing a premium of 42pc to Tableau's Friday closing price.

Salesforce's deal comes days after Alphabet Inc's Google bought big-data analytics company Looker for $2.6bn and surpasses the $5.9bn that the cloud-based software company paid to buy US software maker MuleSoft in 2018.

"The acquisition accelerates Salesforce's roadmap for their Customer 360 initiative, which helps companies gain a complete view of their customers, and more broadly their analytics initiative," Wedbush Securities analyst Steve Koenig said.

Big data analytics is a complex process used to uncover hidden patterns, unknown correlations, market trends and customer preferences that often help companies make better business decisions.

The deal is expected to close in the third quarter, after which Tableau will operate independently, led by CEO Adam Selipsky and its current leadership team.

"Tableau helps people see and understand data, and Salesforce helps people engage and understand customers," Salesforce co-CEO Marc Benioff said.

The San Francisco-based company said the deal is likely to add up to $400m in its 2020 revenue, but would decrease adjusted profit by about 37 cents to 39 cents per share.

It said it now expects 2020 adjusted profit in the range of $2.51 per share to $2.53 per share. Analysts were expecting $2.90. Shares of Tableau jumped 35pc to $169.50, while those of Salesforce fell 5pc to $156.43 in premarket trading.

"Salesforce shares are trading down, may be out of fears that the company is buying growth because organic growth is slowing. It's a natural question to ask," Koenig said.

Reuters

Irish Independent

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