All You Need to Know About Salesforce’s $15.7 Billion Acquisition of Tableau

After Google announced buying analytics startup Looker last week for $2.6 billion, Salesforce on Tuesday announced that it is buying Tableau Software in an all-stock deal valued at $15.7 billion.

Salesforce is an American cloud-based software company headquartered in San Francisco that mainly deals in customer-relationship management (CRM) service. Tableau, meanwhile, uses self-service analytics to help people with any skill level work with data. “Tableau helps people see and understand data, and Salesforce helps people engage and understand customers.

It's truly the best of both worlds for our customers, bringing together two critical platforms that every customer needs to understand their world,” Salesforce Chairman and co-CEO Marc Benioff said in a statement. Below are some key points you should know about the Salesforce-Tableau deal:

- The deal, which has been approved by both companies’ boards, is expected to close during the third quarter of the fiscal year ending 31 October 2019.

- Each share of Tableau common stock will be exchanged for 1.103 shares of San Francisco-based Salesforce.

- The acquisition is expected to add about $350 million to $400 million to Salesforce’s fiscal 2020 revenue.

- However, the deal may result in a 75 basis points year-over-year hit to Salesforce’s operating margin and an impact of between 37 cents and 39 cent on earnings per share for the current fiscal year.

- The deal is the biggest acquisition by Salesforce and will allow it to add more value to its customer relationship management (CRM) offering. Salesforce’s previous largest acquisition was its $6.5 billion purchase of application network platform provider Mulesoft that closed early last year.

- Co-chief executive officers Marc Benioff and Keith Block at Salesforce have promised revenue of $28 billion a year by fiscal 2023.

- Tableau has about 86,000 business customers, including Charles Schwab, Verizon, Schneider Electric, Southwest and Netflix. Salesforce said Tableau will operate independently and under its own brand post-acquisition.

- Tableau will also remain headquartered in Seattle, Washington, headed by CEO Adam Selipsky along with others on the current leadership team

- Shares of Tableau Software jumped 34.2% before the market opened Monday. Salesforce’s shares fell 4.5% in pre-market trading.