Salesforce said Tuesday that it will buy Slack, the workplace software company, for $27.7 billion in cash and stock.

  • The acquisition — which has not been completed yet — would end Slack’s run as a public company (it first went public in 2019).
  • Salesforce is paying $27.7 billion for Slack, according to the press release. “Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce’s common stock on Nov. 30, 2020,” Salesforce said in its announcement on the purchase.

Salesforce CEO Marc Benioff said in a statement:

  • “Stewart (Butterfield) and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it. This is a match made in heaven. Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world. I’m thrilled to welcome Slack to the Salesforce Ohana once the transaction closes.”

Context

According to The New York Times, “the deal is the biggest bet among a recent spate of acquisitions made by tech companies to capitalize on the shift to remote work,”

  • Adobe recently bought management company Workfront, for example.

The deal is already one of Salesforce’s biggest acquisitions to date, representing the company’s jump into communication technology at a time where remote work has become more important, according to Business Insider.

  • The move immediately puts Salesforce into competition with Microsoft, which has had its own Microsoft Teams app.
  • “The deal also benefits Slack, which has seen relatively flat growth rates during the pandemic while other collaboration tools have seen skyrocketing demand and revenue,” according to Business Insider.