8-KMaterial AgreementsExhibits & Filings

Salesforce, Inc. 8-K Report, Material Agreement (Mar 30, 2011)

Filed March 30, 2011For Securities:CRM

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.

Frequently Asked Questions

This 8-K filing serves to inform investors about a material definitive agreement entered into by Salesforce.com, Inc., specifically the Share Purchase Agreement to acquire Radian6 Technologies Inc.

While the filing doesn't detail Radian6's specific business, it was a Canadian corporation. Based on the timing and Salesforce's strategy, it's highly probable Radian6 was involved in social media monitoring, engagement, or related customer intelligence technologies, indicating a strategic expansion for Salesforce into these areas.

The acquisition is being financed through a combination of cash and Salesforce's common stock. Specifically, 80% of the total purchase price will be paid in cash, and the remaining 20% will be paid in shares of Salesforce's common stock, valued based on a 20-trading day weighted average reference price.

The total consideration is approximately $350 million. Part of the cash portion, $42 million, will be placed in escrow for two years to secure indemnification obligations of the Radian6 shareholders for breaches of representations or warranties. Certain payments to Radian6 founders and for vested stock options are also subject to adjustments and potential conditions.