01—Abstract
Summary
Summary of the 8-K filed December 1, 2020. Cited figures are marked; the original filing is the authoritative source.
Salesforce, Inc. (CRM) announced on December 1, 2020, a significant definitive agreement to acquire Slack Technologies, Inc. This acquisition will be structured as a merger, where Slack will become a wholly-owned subsidiary of Salesforce.
The transaction is an all-stock deal with a cash component, valuing Slack at a specific exchange ratio of 0.0776 Salesforce shares and $26.79a in cash for each Slack share. This strategic move aims to enhance Salesforce's Customer 360 platform by integrating Slack's communication and collaboration capabilities, potentially driving significant revenue synergies and expanding its enterprise software dominance.
The deal is subject to customary closing conditions, including regulatory approvals and shareholder votes, with an expected completion by August 2021, though extensions are possible. The financing for the cash portion involves both existing cash reserves and a new $10.0 billionb bridge loan facility.
02—Key points
Key Highlights
- Salesforce to acquire Slack Technologies, Inc. in a stock and cash merger.
- The transaction values Slack at 0.0776 shares of Salesforce common stock and $26.79 in cash per Slack share.
- The acquisition aims to integrate Slack's collaboration tools into Salesforce's Customer 360 platform.
- The deal is subject to customary closing conditions, including regulatory and shareholder approvals.
- The transaction is expected to close by August 1, 2021, with potential for extensions.
- Salesforce has secured a $10.0 billion bridge loan facility to finance the cash portion of the acquisition.
- Key Slack stockholders representing approximately 55% of voting power have entered into a Voting and Support Agreement to approve the merger.
03—Questions
Frequently Asked Questions
What is the primary strategic rationale behind Salesforce acquiring Slack?
Salesforce aims to integrate Slack's leading communication and collaboration capabilities into its Customer 360 platform. This integration is expected to create a more unified and powerful customer relationship management (CRM) ecosystem, enhance customer engagement, and drive significant revenue synergies by cross-selling and up-selling opportunities.
How will Slack shareholders be compensated in this acquisition?
Slack shareholders will receive a combination of Salesforce common stock and cash for each share of Slack they own. Specifically, the merger consideration is 0.0776 shares of Salesforce common stock and $26.79 in cash per Slack share. Certain equity awards will also be addressed according to the terms of the merger agreement.
What are the key conditions that must be met for the acquisition to close?
The completion of the merger is contingent upon several conditions, including: approval by Slack's shareholders, listing of the Salesforce shares to be issued, effectiveness of a registration statement on Form S-4 filed by Salesforce, accuracy of representations and warranties, compliance with covenants, absence of any legal prohibitions (including antitrust approvals under the Hart-Scott-Rodino Act and other specified laws), receipt of tax opinions, and the absence of a material adverse effect on Slack.
How is Salesforce financing the cash portion of the acquisition?
Salesforce plans to finance the cash component of the merger consideration through a combination of cash on its balance sheet and new debt. The company has secured a commitment for a $10.0 billion, 364-day senior unsecured bridge loan facility from a syndicate of banks to support the transaction.
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