Slack Acquisition: Key Details, Impact, and What Comes Next

Salesforce's acquisition of Slack, finalized on July 21, 2021, marks a significant shift in the enterprise software landscape. By integrating Slack's digital communication tools with Salesforce's CRM capabilities, the merger aims to create a unified platform for business operations. This strategic move underscores the growing importance of digital-first work environments and enhanced organizational connectivity.

What Is Slack?

Founded in 2013, Slack offers a suite of work management and productivity tools designed to enhance collaboration and efficiency. Its core products include channels, messaging, project management templates, and AI-driven features like Slack AI and Agentforce. Slack stands out in the market with its extensive integrations, allowing over 2,600 apps to connect seamlessly, and its enterprise-grade security features. Additionally, it boasts high user satisfaction and widespread adoption among Fortune 100 companies.

Who Acquired Slack?

Salesforce is a leading provider of customer relationship management (CRM) software, integrating CRM, data, analytics, and AI to help businesses make smarter decisions and grow revenue. Key products include the Starter Suite for small businesses, Agentforce for AI-driven support, and tools for sales, service, marketing, and commerce. Recognized as the world’s #1 CRM for 11 consecutive years, Salesforce holds significant influence in the market, offering solutions across various industries.

When Was Slack Acquired?

Salesforce completed its acquisition of Slack on July 21, 2021. This strategic move occurred during a period marked by a significant shift towards remote and hybrid work environments, driven by the COVID-19 pandemic. The merger aims to address the growing need for digital-first solutions, combining Salesforce's CRM capabilities with Slack's communication tools to create a comprehensive platform for business operations in an increasingly digital world.

Why Was Slack Acquired?

• Market Expansion: The acquisition allows Salesforce to expand its market by integrating Slack's digital communication platform with its CRM solutions. This combination aims to create a comprehensive digital HQ for businesses, enhancing their ability to connect with employees, customers, and partners globally. As part of the world’s #1 CRM, Slack will be able to expand its presence in the enterprise, not just among Salesforce customers, but for any company undergoing digital transformation.
• Technology Integration: The integration of Slack with Salesforce's Customer 360 platform is a key technological advancement. This integration aims to provide a single source of truth for businesses, connecting employees, customers, and partners with the apps they use daily. Slack will transform how people communicate, collaborate, and take action on customer information across Salesforce, making work life simpler and more productive.
• Competitive Advantage: The merger creates a competitive advantage by combining Salesforce's leading CRM capabilities with Slack's innovative communication platform. This combination is expected to redefine enterprise software, offering a unique "digital HQ" that supports remote and hybrid work environments. The integration is also anticipated to foster a dynamic ecosystem for developing next-generation digital-first apps and workflows, providing a significant edge in the market.

Acquisition Terms

• Acquisition Price: 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 November 30, 2020.
• Payment Method: The transaction was completed using a combination of cash and Salesforce common stock. Specifically, Slack shareholders received $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share.
• Key Conditions or Agreements:
  • The transaction required approval by Slack stockholders and the receipt of required regulatory approvals.
  • Salesforce entered into a voting agreement with certain stockholders of Slack common stock, representing approximately 55% of the current outstanding voting power of Slack common stock, to vote in favor of the transaction.
  • Salesforce funded the cash portion of the transaction consideration with a combination of new debt and cash on Salesforce’s balance sheet, including a $10.0 billion senior unsecured 364-day bridge loan facility.

Impact on Slack

The acquisition of Slack by Salesforce has led to notable changes in operations and management. Slack continues to operate under its brand, with Stewart Butterfield remaining as CEO. This continuity ensures that Slack's core values and operational strategies remain intact while benefiting from Salesforce's extensive resources. The integration aims to create a "digital HQ," combining Salesforce's CRM capabilities with Slack's communication tools to enhance productivity and collaboration across businesses.

Product offerings and services have seen significant enhancements post-acquisition. The merger has resulted in the "Slack-first Customer 360" platform, providing a unified source of truth for businesses. This integration allows companies to connect employees, customers, and partners more effectively, fostering the development of next-generation digital-first apps and workflows. Employee reactions have been generally positive, with large organizations like IBM already adopting the integrated platform. Customers, too, have expressed enthusiasm, anticipating improved connectivity and productivity.

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