According to a source familiar with the matter, customer relations software giant Salesforce (NYSE:CRM) is currently in advanced negotiations to acquire Informatica, marking another significant move in the bustling technology sector.
Reportedly, the proposed acquisition price falls below Informatica’s current share value of $38.48, as per the Wall Street Journal, which initially broke the news of the discussions between Salesforce and Informatica.
Both Salesforce and Informatica have yet to provide official comments or responses regarding the reported talks.
Meanwhile, private equity firm Permira, in conjunction with the Canadian Pension Plan Investment Board (CPPIB), which collectively holds a controlling interest of over 75% in Informatica, declined to offer any comments. Attempts to reach CPPIB for a response were unsuccessful.
Established in 1993, Informatica specializes in subscription-based cloud data management services, catering to over 5,000 active clients and offering automation solutions.
Headquartered in Redwood City, California, Informatica boasts an impressive client roster including multinational corporations like Unilever (LON:ULVR) and Deloitte.
Informatica’s stock has surged by nearly 43% year-to-date, effectively valuing the company at approximately $11.35 billion.
In 2015, Informatica was privatized for around $5.3 billion by a consortium featuring Permira and CPPIB. Six years later, the company returned to the public market following its acquisition by Permira and CPPIB.
If the acquisition materializes, it would mark Salesforce’s largest deal since its acquisition of workplace messaging app Slack Technologies (NYSE:WORK) in 2020, valued at nearly $28 billion.
Salesforce’s aggressive approach to acquisitions has faced scrutiny in the past. In early 2023, activist investors, including ValueAct Capital and Elliott Management, raised concerns about the company’s strategy, prompting management to implement cost-cutting measures, increase share buybacks, and disband its M&A board committee.
Notably, Salesforce has a history of prolific acquisitions, including the 2019 purchase of data analytics platform Tableau Software in an all-stock deal valued at $15.7 billion.
The tech sector has been witnessing a surge in deal-making activity, fueled by the growing interest in artificial intelligence. Recent notable deals include design software company Synopsys (NASDAQ:SNPS) agreeing to acquire smaller rival Ansys (NASDAQ:ANSS) for approximately $35 billion in January, and Hewlett Packard Enterprise (NYSE:HPE) striking a $14 billion deal to acquire networking gear maker Juniper Networks (NYSE:JNPR).
According to Dealogic, technology accounted for the largest share of mergers and acquisitions during the first quarter, experiencing a year-on-year increase of over 42% to approximately $154 billion.