$2.5 Billion for Salesforce.com's Acquisition of ExactTarget

ExactTarget is an Indianapolis-based publicly traded company, which is set to be purchased by Salesforce.com for the sum of $2.5 billion. ExactTarget is a key player in cross-channel, digital-marketing Software-as-a-Service (SaaS) solutions.

A tender offer for all outstanding shares of ExactTarget for $33.75 per share will be issued by Salesforce.com, under the terms of the agreement. This deal has already been approved by the boards of both companies.

Further marketing functions to the Salesforce CRM platform are expected to be made available as a result of the acquisition. This is particularly the case with regards to the use of email, mobile communications and social media, with related automation capabilities. An extra 6,000 customers will also be brought forward by ExactTarget, and this includes brands like Coca-Cola, Gap and Nike.

According to Gartner, there has been an increase in the investments made in digital marketing (which has grown in excess of 20 percent). This move will mean that Salesforce.com can better integrate marketing functions into the CRM offerings it already provides.

The CEO of Salesforce.com, Marc Benioff, said: "The CMO is expected to spend more on technology than the CIO by 2017. The addition of ExactTarget makes Salesforce.com the starting place for every company and puts Salesforce.com in the sole position to capture this opportunity."

A partner with Datasmith Network Solutions of Walpole, Massachusetts, Paul Smith, commented on the merging of CRM with market capabilities, stating that it made a lot of sense to him.

Smith said: "People need to understand their client base and have a lot more data to work with these days, especially if they're using a lot of different media to reach their customers. So the fact that Salesforce.com is picking up on this customer behavior method is going to be a strong advantage. The more that people know about their customers, the more likely they are to understand what those customers are buying, how they spend, what resource levels look like and what they need to buy moving forward. Also, data analytics is currently emerging as a major opportunity, and one that can help companies leverage the large quantities of information that are being gathered. So this is going to run parallel and consistent to that trend. It will be interesting to see how the forthcoming strategy evolves."

In Salesforce.com's fiscal year 2014, the acquisition is expected to increase the total revenue by $120 million to $125 million. For the same fiscal year, the non-GAAP earnings per share will most likely be reduced by $0.16. Salesforce.com's fiscal second quarter ends July 31, 2013, and it is around this time that the transaction is expected to close. This means that the impact of the acquisition will be limited with regard to second-quarter financials. (CY) Link