Salesforce Inc. has agreed to acquire MuleSoft Inc. for $6.5 billion, which represents its largest acquisition ever, as the leader in the market for customer-relationship software goes on an expansion quest for new products as well as corporate users.
Salesforce, based in San Francisco, will pay $36 cash and 0.0711 shares of its own common stock for each share of MuleSoft, said the statement announcing the acquisition. That represents a premium of 36% above the closing share price of MuleSoft on Monday.
Salesforce has attempted to compete with its larger rivals that include Microsoft and Oracle through expanding upon its corporate offerings in software. The deal on Tuesday, which should close July 31, will give it access to the 1,200 customers of MuleSoft and the opportunity to sell those same customers complementary products.
The company’s goal is to double its annual revenue over the next four years, but growth slowed of late. MuleSoft grew rapidly through helping businesses such as Coca-Cola and McDonald’s connect data sources, applications and devices through using in-house servers or cloud providers.
The CEO at Salesforce in an email addressed to employees at MuleSoft said that the integration into Salesforce of MuleSoft is a strategic priority as the company heads toward sales of $20 billion.
The market capitalization of Salesforce.com has skyrocketed of late. Shares of the company were down by 2.2% during extended Tuesday trading. The company announced that it would pay for its cash part of the transaction with its existing funds and through the borrowing of $3 billion.
This transaction caused Salesforce to raise its goal for revenue for the fiscal year that ends for Salesforce on January 31, 2022, by $1 billion to between $21 billion and $23 billion. The company added that its operating profit margin would not improve the amount that was projected previously.
It added that MuleSoft might help to mitigate a slowdown of recent in the growth of Salesforce. The company posted revenue growth at 58% and is on course to expand by 40% during 2018.
Revenue from existing business at Salesforce that helps businesses build custom apps, increased by 37%, the largest jump of all units, to end at $536.3 million for the most recently ended quarter.
Salesforce added that MuleSoft would help create a service it called “Integration Cloud” that combines the best traditional in-house computing with apps and data from the internet.