Summary
Salesforce.com, Inc. (CRM) filed an 8-K report on March 30, 2011, to disclose a material definitive agreement. The company, through its wholly-owned subsidiary salesforce.com Canada Corporation, entered into a Share Purchase Agreement to acquire Radian6 Technologies Inc. for an aggregate consideration of approximately $350 million. This acquisition marks a significant strategic move by Salesforce to expand its capabilities, likely in the social media or customer engagement space given Radian6's profile. The transaction is structured with 80% of the purchase price paid in cash and 20% in Salesforce common stock. A portion of the consideration for Radian6 founders and vested stock options are subject to vesting conditions and employment agreements, aiming to retain key talent post-acquisition. The deal also includes customary representations, warranties, indemnification provisions, and escrow arrangements for up to $42 million to secure indemnification obligations. This acquisition is a key indicator of Salesforce's growth strategy through inorganic means, aiming to enhance its product offerings and market position.
Key Highlights
- 1Salesforce.com, Inc. has entered into an agreement to acquire Radian6 Technologies Inc. for approximately $350 million.
- 2The acquisition will be paid for with a combination of 80% cash and 20% Salesforce common stock.
- 3The transaction involves the assumption of Radian6 stock options, with unvested options becoming exercisable for Salesforce common stock.
- 4Key Radian6 employees have entered into non-competition, non-solicitation agreements, and employment offer letters to facilitate integration.
- 5A portion of the purchase price ($42 million) will be held in escrow for two years to cover indemnification obligations.
- 6The deal is subject to customary closing conditions and has a termination date of May 31, 2011.