Salesforce.com to buy Demandware in $2.8 billion deal

Salesforce on Wednesday announced a $2.8 billion deal to buy Demandware, which provides cloud-based software that is used by companies to run their e-commerce websites and manage store operations.

San Francisco-based Salesforce, through this transaction with Massachusetts-based Demandware, will be able to make a strong push into commerce and add those services to its suite of customer service management products.

“Demandware is an amazing company, the global cloud leader in the multi-billion dollar digital commerce market,” said Marc Benioff, chief executive officer of Salesforce.

The purchase puts Salesforce in position to capture sales from a rise in spending on digital commerce platforms. That market is expected to grow by more than 14 percent a year and reach $8.6 billion by 2020, according to a report by research firm Gartner that, the two companies cited in their announcement.

Demandware would sell itself for $75 a share through the proposed deal.

The Demandware shares would be purchased in an all-cash transaction, the two companies said.

The purchase should be complete by July 31 of this year, the companies estimated.

Salesforce estimated that the deal will increase its total revenue for the fiscal year of 2017 that ends in July by roughly $100 million to $120 million.

Over the 12 months that ended in April, Salesforce revenue totaled $7.07 billion and losses totaled $12.8 million. Over the 12 months that ended in March, Demandware revenue totaled $254.1 million and losses totaled $43.1 million.

Shares of Demandware soared on Wednesday, while Salesforce shares slipped.

Some analysts believe the deal could eventually be a great boost to retailers that have struggled with brick-and-mortar store transactions amid fierce competition from the online sites of Amazon, eBay and others.

That’s because the Salesforce and Demandware technologies would enable retailers to meld transactions, customer service and marketing in a seamless array of cloud-based services.

Retailers have been seeking ways to blend in-store experiences with the internet.

“We will be well positioned to deliver the future of commerce,” Benioff said.

 

Image: Salesforce and Demandware deal announcement as it appeared on the Salesforce website.

 

Tags: , , , , , , , , ,

 

Share this Post



 
 
 
 
 
css.php