Salesforce to Buy Demandware in $2.8 Billion Transaction

That’s one of the largest acquisitions for the cloud-computing software firm to date.

Paul Hamerman, Forrester Research VP, said the move will enable Salesforce to sell directly to e-commerce customers. As part of the deal, Salesforce will launch a tender offer for $75 a share for each Demandware share outstanding, which represents a 56% premium to Tuesday’s closing price.

The e-commerce landscape just shifted with the announcement Salesforce will purchase Demandware for $2.8 billion. Salesforce.com has been the topic of 87 analyst reports since August 21, 2015 according to StockzIntelligence Inc. Before Wednesday, Demandware shares were down 11 percent for the year, while Salesforce had gained 7 percent. Revenues were primarily driven by growth across all its business segments and the Salesforce ExactTarget Marketing Cloud platform. Marketing Cloud posted $654.1 million in revenue during the 12 months ended January 31, growing 29% from the same period a year earlier. Revenue in the three months ended April 30 rose 27% to $1.92 billion.

Salesforce declined to comment on the performance of its acquisitions.

Salesforce seems to be making a solid investment.

Salesforce Commerce Cloud wants to transform the e-commerce and cloud platform to be an integral part of the company’s success, creating opportunities for enterprises to connect and reach out to their valued customer in new and exciting ways. The Company offers consulting deployment training implementation and integration services to its customers to facilitate the adoption of its cloud solutions. Those include IBM Corp., Oracle Inc. and the hybris division of SAP. The company markets its cloud-based platform to multinational corporations, retailers and branded manufacturers in apparel and footwear, health and beauty, home and garden, sporting goods, general merchandise and other categories through its direct sales force and channel partners. Salesforce increased its revenue guidance, now saying it expects 2017 revenue of between $8.26 billion to $8.32 billion, up from $8.16 billion to $8.20 billion previously.

Salesforce paid $75 a share. The company had raised a mere $54 million when it was still a startup, mostly from only three investors, by the looks of it. The Wisconsin-based Winch Advisory Services Llc has invested 5.56% in the stock. This estimate reflects an approximately $50 million reduction relating to fair value adjustments to deferred revenue and unbilled deferred revenue, adjustments related to the combined customer base, and inter-company revenue elimination.

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