Salesforce ( CRM ) is close to a deal to buy data management company Informatica ( INFA ) for $11 billion, according to multiple reports. – So both tickers are at the top of Yahoo Finance’s ‘Trending Ticker’ page this morning.
Salesforce shares fell on the news because it wasn’t clear whether Vibrant would be a good fit for the business on the street (it has lower margins than Salesforce).
The Street likes Salesforce, which has become increasingly focused on expanding profit margins after facing a sudden onslaught from activist investors last year (in part due to soft acquisitions). This is Salesforce’s first major deal since its $28 billion acquisition of Slack in 2021.
According to reports, Informatica’s share is low because Salesforce does not pay company premium.
Knowing Salesforce co-founder and CEO Marc Benioff, I’m a little surprised at the possibility of a deal. Over the past few months, he has repeatedly told me that Salesforce is focused on increasing profit margins – in fact, the company even fired its M&A team last year!
Still, Benioff likes to make big deals, and the company has the money to do it. So why not?
