Customer relationship management company Salesforce (CRM) has signed an agreement to buy Israel-based start-up Own Company for $1.9 billion in cash. Own Company provides data protection and management services, enabling organizations to protect and analyze their mission-critical data. CRM shares spiked over 6% in extended trading on the news yesterday.
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The deal is expected to close in the company’s fourth quarter of Fiscal 2025, which will end in January 2025. The deal is subject to certain closing and regulatory conditions. The transaction will be accretive to Salesforce’s free cash flow beginning in the second year following the deal closure. The acquisition comes at a crucial time when cyberattacks and system failures are increasing rapidly.
Salesforce on an Acquisition Spree
CRM already owns 10% of Own Company, and will buy the remaining stake for $1.9 billion. The acquisition underscores Salesforce’s commitment to provide full scale data protection and management solutions on Cloud to its customers, all backed by the power of AI (artificial intelligence). Own’s platform also helps customers analyze and utilize their historical data to make decisions and understand trends and forecasts.
Salesforce seems to be on a hunting spree now, a year after it completely shut down its M&A committee in 2023 under activist pressure. Since then, Salesforce has shifted its focus toward share repurchases. Just yesterday, Salesforce announced the acquisition of Tenyx, an AI-based voice solutions provider. Salesforce also bought smaller player PredictSpring recently.
Website Traffic Hints at Salesforce’s Growing Business
Salesforce is one of the largest CRM solution providers globally and is further strengthening its position with strategic acquisitions. Its website visits hint at its growing business. According to TipRanks’ Website Traffic tool, the total estimated visits to all of Salesforce’s apps and websites worldwide increased by 21.03% in the year-to-date period compared to last year.
Is CRM a Good Stock to Buy Now?
Wall Street remains cautiously optimistic about Salesforce stock’s trajectory. On TipRanks, CRM stock has a Moderate Buy consensus rating based on 27 Buys, eight Holds, and one Sell rating. The average Salesforce price target of $306.83 implies 24.7% upside potential from current levels. CRM shares have declined 6.2% so far this year.
