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April 15, 2024

Salesforce In Talks To Buy Informatica: Report

Informatica, one of the preeminent names in ETL, is considering a deal to be acquired by enterprise cloud software provider Salesforce, according to a report by the Wall Street Journal last week. If completed, the deal would net Salesforce a large catalog of well-respected data management tools and a customer list full of blue-chip names.

According to the WSJ’s April 12 story, Salesforce is in “advanced talks” to acquire Informatica, which would be among its largest acquisitions to date. While a price wasn’t specifically mentioned, the WSJ says the price its anonymous source disclosed is below Informatica’s current market capitalization of about $11 billion.

Amit Walia took over the CEO job at Informatica in January 2020

Informatica’s stock is down 9% today compared to its closing price on Friday. The stock is up a total of 11% for the year.  Salesforce’s stock, meanwhile, is down about 7% today compared to its Friday close. The cloud giant’s market capitalization is about $264 billion.

Informatica has developed a reputation as one of the premiere providers of data management tools for corporate IT systems. Starting with its PowerCenter extract, transform, and load (ETL) tool, Informatica’s software was widely adopted by companies that needed to move data from transactional systems into data warehouses. After Y2K, the Redwood City, California company expanded into neighboring data disciplines, including master data management (MDM), data quality management, and data governance.

Following its delisting from NASDAQ in 2015, Informatica was acquired for $5.3 billion by Permira funds and the Canada Pension Plan Investment Board. The company pivoted its focus from on-prem to cloud-based systems and hybrid data management. In 2020, tech executive Amit Walia took over as CEO of Informatica, and the company began pushing into AI-infused data management tools with its Claire suite. In 2021, Informatica had its second IPO, this time on the NYSE. The company reported $1.51 billion in revenues during 2022 with total income of $54 million.

Meanwhile, Salesforce has become one of the biggest players in enterprise software, analytics, and AI through both organic grown as well as through acquisition. The $15.7 billion acquisition of Tableau in 2019 netted the San Francisco one of the most respected suites of business intelligence and analytics tools on the market. Since then, Salesforce, which had $35 billion in revenue last year, has moved forcefully into generative AI with Einstein, which it has integrated with its BI products as well as core customer relationship management (CRM) and other enterprise software applications.

If completed, Salesforce’s acquisition of Informatica will net it a well-respected suite of ETL, data management, and data overmine tools, a sector that’s in demand as companies find their data is not as ready for generative AI initiatives as they had hoped. The fact that Informatica has a roster of 5,000 customers, including blue chip names like Unilever, BMW, and Freddie Mac, will also be attractive to Salesforce, which has 150,000 existing customers.

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