Salesforce to Boost Analytics Suite With $15.7B Deal to Buy Tableau

[Updated 6/11/19 10:36 a.m. See below.Salesforce is joining forces with Tableau Software, announcing Monday it plans to acquire Seattle-based Tableau in an all-stock deal valued at $15.7 billion. The transaction would combine one of the world’s largest and best known sales-focused software vendors, San Francisco-based Salesforce, with one of the leading vendors of data visualization and analytics software.

In a blog post reflecting on his company’s agreement to be acquired by Salesforce, Adam Selipsky, president and CEO of Tableau, writes that the deal combines its business intelligence chops and “ability to help people see and understand data with [Salesforce’s] ability to help people engage and understand customers.”

The board of directors at both companies have approved the transaction, though it still awaits regulatory approval, according to a news release. Salesforce says it expects the deal will close between August and October.

Following the close of the acquisition, Tableau would continue to operate independently under its own brand, Salesforce says in a statement. Tableau, which has about 4,200 employees, would remain headquartered in Seattle and its current leadership team, including Selipsky, would stay in pace, Salesforce says.

The enterprise value Salesforce has assigned Tableau under the terms of the deal, $15.7 billion, is based on the “volume-weighted average price” of Salesforce’s shares as of June 7, the company says.

Shares in Tableau (NYSE: DATA) were up more than 33 percent in early afternoon trading Monday. The company’s stock was trading at $167.48 a share, giving Tableau a market capitalization of about $14.4 billion, up from about $10.8 billion on June 7. Meanwhile, shares of Salesforce (NYSE: CRM) traded at $153.14 apiece midday Monday, down more than 5 percent from Friday’s closing price. The company’s current market cap is about $118 billion.

Robert W. Baird & Co. senior research analyst Rob Oliver and senior research associate Matt Lemenager write in a note that one reason the deal makes sense for Salesforce is it gives the company access to Tableau’s “fanatical user base that is arguably unrivaled in enterprise software.” [Updated with comments from Baird analysts.]

“Salesforce is acquiring a group of users [and] customers who are innovative, loyal, and ambitious about the future of” business intelligence, Oliver and Lemenager write.

Christian Chabot, Pat Hanrahan, and Chris Stolte co-founded Tableau in 2003. Part of the founding team’s mission involved developing methods for visualizing structured data from databases, and building software with data visualization at the heart of its design.

Tableau grew rapidly during its first decade in business, and went public in 2013. The company has since seen plenty of additional growth; Tableau says it has more than 86,000 customers across the globe, including Netflix (NASDAQ: NFLX), Southwest Airlines (NYSE: LUV), and Verizon Communications (NYSE: VZ).

Tableau has also made changes to its leadership team in recent years. In 2016, it brought on Selipsky, who had previously been an executive at Amazon (NASDAQ: AMZN) Web Services, to head the company as its CEO.

Salesforce, for its part, has grown into a powerhouse in the business software world during the two decades since Marc Beniofff founded the company. Its revenues for the fiscal year ended Jan. 31 were more than $13.2 billion, and Salesforce said earlier this year it employed more than 35,000 people globally.

Salesforce has made a spree of deals to purchase smaller software companies in recent years. In 2019 alone, the company has announced agreements to acquire, MapAnything, and RoundCorner before the Tableau deal.

Elsewhere, Google (NASDAQ: GOOGL) announced last week it planned to acquire data analytics business Looker, of Santa Cruz, CA, for $2.6 billion.

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