salesforce.com (CRM) is in the final stages of negotiations to acquire data management software maker Informatica (INFA) The Wall Street Journal reported Friday night, citing people familiar with the matter.
X
However, the potential transaction price being discussed is below Informatica stock's Friday closing price of 38.48. INFA stock soared 43% in 2024 due in part to acquisition talk, giving it a market capitalization of $11.2 billion.
Informatica helps businesses manage data in the cloud and onsite, and recently introduced artificial intelligence tools.
“If the acquisition goes through, we believe it would complement (Salesforce's) MuleSoft and expand Salesforce's data management capabilities,” Jefferies analyst Brent Thill said in a report. “It will also unlock opportunities in data cloud and artificial intelligence.”
Salesforce acquired MuleSoft in 2018 for $6.5 billion.
Trading could increase AI revenue
Thill added, “To drive AI adoption across an organization, customers need to connect data in different silos within the enterprise. MuleSoft enables this to some extent, but Informatica's data management “The functionality will enable us to connect data more effectively,” he added. It resides in various software systems throughout the organization. ”
He added that Informatica's 2023 revenue increased by 5%. He noted that Informatica generated an operating margin of 29% last year.
“We believe this growth profile is lower than the growth profile that Salesforce has historically pursued,” Thill said. “Apart from potential synergies, we expect the reported potential acquisition of INFA to have minimal dilution to Salesforce's benefits.”
On Friday, Salesforce stock fell 1.6% to 294.32, below its 50-day line. The flat base buy point for CRM stock is 318.71.
Follow Ed Carson's thread @edcarson1971 and X/Twitter. @IBD_ECarson The latest information on the stock market, etc.
You'll probably also like:
Why this IBD tool simplifies your search for top stocks
The best growth stocks to buy and watch
IBD Digital: Get access to IBD's premium stock lists, tools and analysis now
Tesla FSD subscription price reduced to $99 per month
How will the market react to the Iranian attack and the Iranian attack on Israel?
