April 24, 2024

Salesforce-Informatica Deal Appears to Have Fallen Through

Alex Woodie

(NESPIX/Shutterstock)

Talks between Salesforce and Informatica appear to have ended, and no acquisition is expected at this time, according to published reports.

A union between Salesforce, the $34-billion enterprise cloud giant, and data integration specialist Informatica, which brought in $1.6 billion in revenues last year, appeared to be on the cusp of happening last week after the Wall Street Journal broke the news based on information from insiders.

But just days later, the deal fell apart. Ultimately, the companies couldn’t agree on a price, according to the WSJ, which said the deal was in the $10 billion range.

Salesforce initially was negotiating a deal for Informatica’s shares valued in the mid-$30s, the newspaper said. After reports of the deal were made public, Informatica’s stock dropped from about $38 per share to about $31 per share, representing about a 15% decline. Informatica’s stock has not recovered, and its market capitalization is currently about $9.4 billion.

That decline hurt the negotiations, and ultimately Salesforce abandoned its pursuit of Informatica after the company could not agree on terms, Reuters said, citing anonymous sources.

If it went through, it would have been one of Salesforce’s biggest acquisition, second only to its acquisitions of Tableau and Slack. Salesforce has come under greater scrutiny with its acquisition strategies in recent months, which ultimately may have impacted its appetite for Informatica.

Gaurav Dhillon, who co-founded Informatica in 1993 and now is the CEO of SnapLogic, said he has mixed feelings about the deal.

“On the one hand, I understand why it might be happening and it makes sense in theory,” he told Datanami. “It is a crystal clear ‘i-told-you-so’ moment for me and why I founded SnapLogic, because most enterprises are going to need one platform, for application and data integration. But on the other hand, it will likely create massive turmoil for Informatica (and Mulesoft) customers.”

If Salesforce had completed the acquisition, it would have required Salesforce to merge Mulesoft and Informatica, which he dubbed “a slow, painful process that will take years if all goes according to plan.”