Salesforce Is Acquiring Tableau In $15.7 Billion Deal

By Amit Chowdhry ● June 10, 2019
  • Salesforce is acquiring Tableau in a $15.7 billion deal
  • Going forward, Tableau will operate independently under the Tableau brand with the current leadership team in place
  • Tableau will be integrated into Einstein, Salesforce’s AI-powered analytics for sales and marketing

Salesforce has signed a definitive agreement that it is acquiring Tableau in a $15.7 billion deal. Salesforce plans to play a greater role in driving digital transformation with Tableau.

Going forward, Tableau will operate independently under the Tableau brand. And Tableau will remain headquartered in Seattle. And the company will continue to be led by CEO Adam Selipsky and the current leadership team.

Salesforce is facilitating the deal in an all-stock transaction pursuant to which each share of Tableau Class A and Class B common stock will be exchanged for 1.103 shares of Salesforce common stock. This represents an enterprise value of $15.7 billion (net of cash) based on the trailing 3-day volume weighted average price of Salesforce’s shares as of June 7, 2019. And this transaction is intended to be tax-free for Tableau stockholders (except with respect to cash for fractional shares). This transaction has been approved by the boards of directors at both companies.

Tableau founders Christian Chabot, Patrick Hanrahan, and Chris Stolte all entered into an agreement with Salesforce in connection with the transaction and indicated that they intend to tender all of their shares in the exchange offer.

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“We are bringing together the world’s #1 CRM with the #1 analytics platform. 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,” said Salesforce chairman and co-CEO Marc Benioff. “I’m thrilled to welcome Adam and his team to Salesforce.”

Through the acquisition, Salesforce will be able to enable companies around the world to tap into their data across their entire business and surface deeper insights for making smarter decisions, driving intelligent customer experiences, and accelerating innovation.

This is especially important as IDC is projecting worldwide spending on technologies and services that will enable digital transformation to reach $1.8 trillion in 2022.

“Salesforce’s incredible success has always been based on anticipating the needs of our customers and providing them the solutions they need to grow their businesses,” added Salesforce co-CEO Keith Block. “Data is the foundation of every digital transformation, and the addition of Tableau will accelerate our ability to deliver customer success by enabling a truly unified and powerful view across all of a customer’s data.”

Salesforce Customer 360 provides companies with a complete and intelligent view of their customers across every touchpoint whether it is sales, service, marketing, or commerce. Salesforce also pioneered AI for CRM with Salesforce Einstein — which now delivers AI-powered analytics for sales and marketing.

By combining Tableau and Einstein, Salesforce is going to deliver the intelligent and intuitive analytics and visualization platform for every department and every user at any company. And Tableau will make both Customer 360 and Salesforce’s analytics capabilities much stronger. Plus it will enable the company to reach a much broader set of customers and users.

“Joining forces with Salesforce will enhance our ability to help people everywhere see and understand data,” explained Tableau president and CEO Adam Selipsky. “As part of the world’s #1 CRM company, Tableau’s intuitive and powerful analytics will enable millions more people to discover actionable insights across their entire organizations. I’m delighted that our companies share very similar cultures and a relentless focus on customer success. I look forward to working together in support of our customers and communities.”

Tableau is known for pioneering self-service analytics with an intuitive analytics platform that empowers people of any skill to work with data. And more than 86,000 organizations around the world like Charles Schwab, Verizon, Schneider Electric, Southwest, and Netflix depend on Tableau to help them visualize and understand data.

Salesforce and Tableau have a shared mission of empowering their communities and enabling people of every skill level to transform their businesses, careers, and lives through technology. Currently, Salesforce has a growing community of over 1.4 million Trailblazers and the Tableau Community consists of over 1 million passionate data enthusiasts. Combined, these two communities will represent the largest group of digital business experts in the world.

What is the financial impact of the deal?  This transaction is expected to increase Salesforce’s FY20 total revenue by approximately $350 million to $400 million. This estimate reflects a fair value adjustment to reduce unearned revenue and unbilled unearned revenue by approximately 30%. And FY20 Revenue is now expected to be $16.45 billion to $16.65 billion — which is an increase of 24% to 25% year-over-year. And the deal is expected to decrease Salesforce’s FY20 non-GAAP operating margin by approximately 75 basis points year-over-year.

The deal is expected to close in October 2019. Bank of America Merrill Lynch is serving as the exclusive financial advisor to Salesforce and Wachtell, Lipton, Rosen & Katz and Morrison & Foerster LLP are serving as legal counsel. And Goldman Sachs is serving as the exclusive financial advisor to Tableau and Cooley LLP is serving as legal counsel.