Some of Slack’s largest customers include Starbucks (NASDAQ:SBUX), Target (NYSE:TGT), and TD Ameritrade, a broker owned by Charles Schwab (NYSE:SCHW). The communication platform serves a range of companies including small businesses, Fortune 500 companies, academic institutions, non-profits, and governments in more than 150 countries. In addition, Slack has 87 paid customers with greater than $1 million in ARR. Slack currently serves 142,000 paying customers, with over 1,000 customers that have more than $100,000 in annual recurring revenue (“ARR”). Slack also improved its bottom line as it reported a net loss of $73 million compared with $360 million in the same period last year. In FQ2/2021, Slack generated revenue of $216 million, an increase of 49% from the same period last year, adding 8,000 new paid customers. Slack operates an enterprise channel-based communications platform that collaborates with developers and integrates with various apps to support internal collaboration and workflows. Salesforce expects to complete the acquisition of Slack by FQ2/2022, subject to approval from Slack stockholders and regulators. Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world.” On the press release, Marc Benioff, CEO of Salesforce, said FIGURE 1: Salesforce Customer 360 Platform Integration with Slack Source: Salesforce & Slack Merger Presentation The integration of Salesforce’s Customer 360 platform with Slack’s communication platform will enable users and developers to connect across various systems, apps, and devices. Slack will operate under Salesforce as a separate operating unit and will continue to be led by CEO and founder, Stewart Butterfield, who is also known for starting the photo-sharing website, Flickr. The new loan facility included commitments from Citigroup (NYSE:C), BofA (NYSE:BAC), and JPMorgan Chase & Co. Salesforce expects to fund the cash portion of the transaction by using cash on its balance sheet and raising $10 billion in a senior unsecured 364-day bridge loan facility. Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce for each Slack share. The transaction provided Slack with an enterprise value of $28 billion and an EV/Revenue of 32x based on Slack’s forecasted revenue for 2021. Salesforce operates a cloud-driven CRM platform with a complementary suite of SaaS-based offerings that enable businesses to integrate marketing, sales, and commerce operations. If the acquisition is successful, which still depends on passing other regulatory hurdles, it would be Salesforce’s largest purchase to date, according to the Wall Street Journal.E Research | Salesforce (NYSE:CRM), a leading customer relationship management (“CRM”) platform, announced the acquisition of Slack Technologies (NYSE:WORK), an enterprise communications platform. “We consider, due to commercial and reputational risks, that Salesforce would be unlikely to disadvantage competitors by degrading interoperability between Salesforce’s CRM solution and competitors’ team collaboration solutions, or between Slack’s team collaboration solution and competitors’ CRM solutions," Sims said. Sims added customers could change to other workplace collaboration platforms such as Microsoft Teams. “Market participants said that if Salesforce engaged in anti-competitive bundling or foreclosure conduct, customers could switch to alternative CRM solutions, including global enterprise software companies such as Microsoft, Oracle, SAP and Adobe," Sims said. Sims said most interested parties didn’t raise concerns with the purchase, however he noted businesses may seek out alternative options should Salesforce engage in anti-competitive conduct as a result of its purchase. “We focused on whether Salesforce having both CRM and team collaboration solutions could give rise to a substantial lessening of competition.”
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