What is the primary strategic rationale behind Salesforce's acquisition of Krux Digital?

The acquisition of Krux Digital, a data management platform, is intended to enhance Salesforce's capabilities in unifying, segmenting, and activating audience data. This move strengthens Salesforce's cloud-based offerings by providing deeper insights and activation tools for customer engagement.

How is the total consideration for the Krux acquisition determined, and what is the estimated number of shares to be issued?

The acquisition consideration is estimated at approximately $340 million, comprising cash and Salesforce common stock. The number of shares to be issued will be based on Salesforce's volume-weighted average closing price over a ten-day period prior to closing, with a floor price of $57.25 and a ceiling of $100.18. This price range suggests an issuance of between 3.4 million and 6 million shares.

Were any shares issued recently by Salesforce that were not registered with the SEC?

Yes, Salesforce disclosed the unregistered issuance of 1,614,432 shares of its common stock between August 1, 2016, and October 3, 2016, as consideration for prior acquisitions. These issuances were made in reliance on exemptions from registration requirements.

When is the expected closing date for the Krux acquisition?

The acquisition of Krux is anticipated to close in Salesforce's fourth fiscal quarter, which ends on January 31, 2017. This is subject to the satisfaction of customary closing conditions, including obtaining necessary regulatory approvals.

CRM 8-K: Securities & Listing

Summary

Salesforce.com, Inc. (CRM) announced on October 3, 2016, its entry into an Agreement and Plan of Reorganization to acquire Krux Digital, Inc. Krux is described as a leading data management platform focused on unifying, segmenting, and activating audience data to enhance user engagement. This acquisition signals Salesforce's ongoing strategy to expand its capabilities in data management and audience activation, further strengthening its cloud-based offerings. The transaction involves a mix of cash and Salesforce common stock, with an estimated total value of approximately $340 million. The stock portion will be determined by Salesforce's stock price over a specific period before closing, with a floor of $57.25 and a cap of $100.18 per share, potentially resulting in the issuance of 3.4 to 6 million shares. A portion of these shares will be subject to vesting tied to continued employment post-acquisition. Additionally, Salesforce disclosed the unregistered issuance of over 1.5 million shares of common stock as consideration for prior acquisitions completed since August 1, 2016. This acquisition is anticipated to close in Salesforce's fourth fiscal quarter ending January 31, 2017, pending customary closing conditions and regulatory approvals.

Key Highlights

1Salesforce enters into an agreement to acquire Krux Digital, Inc., a data management platform, for approximately $340 million in cash and stock.
2The acquisition aims to bolster Salesforce's data management and audience activation capabilities.
3The stock component of the acquisition price is subject to a price collar, ranging from $57.25 to $100.18 per share, influencing the number of shares issued (estimated 3.4 to 6 million).
4A portion of the shares issued for the Krux acquisition will be subject to vesting conditions.
5Salesforce also disclosed the unregistered issuance of 1,614,432 shares of common stock for previous acquisitions completed since August 1, 2016.
6The Krux acquisition is expected to close in the fourth fiscal quarter of 2017.
7The acquisition is subject to customary closing conditions, including regulatory approvals.

Salesforce, Inc. 8-K Report, Unregistered Securities Sale (Oct 3, 2016)

Summary

Key Highlights

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