Salesforce Eyes Informatica, Stocks Dip 5% Amid Deal Talks

Salesforce's stock falls 5% amid talks to buy Informatica, potentially its biggest deal since the $28 billion Slack acquisition.

By Bill Bullington

4/15, 12:41 EDT
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Key Takeaway

  • Salesforce's stock fell 5% after reports of talks to acquire Informatica, potentially its largest deal since the $28 billion Slack acquisition.
  • The market reacted negatively with Informatica shares dropping 9%, amid concerns over its revenue growth pace.
  • Despite Salesforce's dip, the broader tech sector, including Nvidia and Amazon, showed resilience with Nasdaq 100 futures rebounding by 0.5%.

Salesforce's Strategic Move

Salesforce Inc., a leading cloud software company, experienced a 5% decline in its stock price on Monday following reports of its advanced discussions to acquire Informatica, a data-management firm. This potential acquisition, reported by The Wall Street Journal and Reuters, could be announced soon, with the deal's price speculated to be below Informatica's closing stock price of $38.48 on Friday. If successful, this acquisition would be Salesforce's largest since its nearly $28 billion purchase of Slack in 2021, marking another significant addition to its series of acquisitions, including Tableau for $15.3 billion in 2019 and MuleSoft for $6.5 billion in 2018. Salesforce declined to comment on these reports, while Informatica has not responded to requests for comment.

Market Reactions and Implications

The news of the potential acquisition led to a 9% drop in Informatica's shares on Monday. Salesforce CEO Marc Benioff, having previously navigated criticism from activist investors regarding his acquisition strategy, views this deal as a strategic enhancement of Salesforce's data integration and management capabilities. However, the market's initial reaction reflects concerns over the growth pace of Informatica's revenue streams. Analysts from Bloomberg Intelligence and firms like Oppenheimer and Evercore ISI have highlighted the strategic nature of this acquisition, suggesting it could lead to further consolidation in the software-as-a-service industry and possibly attract regulatory scrutiny.

Tech Sector Dynamics

The broader tech sector showed resilience with a rebound in Nasdaq 100 futures by 0.5% amid easing tensions between Iran and Israel, showcasing the sector's volatility and the impact of geopolitical events on market performance. While Salesforce faced a downturn due to the acquisition news, other tech giants like Nvidia, Meta Platforms, Microsoft, Alphabet, and Amazon saw premarket gains. The semiconductor industry, in particular, benefited from a relief rally and U.S. government grants under the 2022 Chips Act, highlighting the strategic importance and growth potential of this sector amidst global supply chain challenges.