Analyst Note| Dan Romanoff, CPA |
Multiple business media outlets are reporting that wide-moat Salesforce.com is in talks to acquire no-moat Slack Technologies. Strategically, this would be a sound acquisition for Salesforce, as it would add serious direct exposure to collaboration and the remote work movement, large and rapidly growing markets that the company indirectly participates in, and would allow for yet another connection between Salesforce and its customers. On the flip side, the deal would undoubtedly be dilutive, would bring Salesforce more in direct competition with Microsoft (Teams), and would reignite investor concerns surrounding Salesforce’s organic growth profile over the next several years. Since we launched coverage of Slack in 2019, we have maintained that over the long term the company must expand its platform or agree to be acquired. We stress that no deal has been formally announced, so obviously there are no deal metrics to consider.