Software giant Salesforce in advanced talks to buy Informatica

By Anirban Sen

(Reuters) -Customer relations software maker Salesforce is in advanced talks to acquire Informatica, a person familiar with the matter told Reuters on Friday, in the latest sign of increased deal-making in the technology sector.

A deal could be announced soon, said the source, who requested anonymity as the discussions are confidential.

The price being discussed is below Informatica’s current share price of $38.48, according to the Wall Street Journal, which first reported the talks between Salesforce and Informatica.

Salesforce and Informatica did not immediately respond to requests for comment.

Private equity firm Permira, which along with the Canadian Pension Plan Investment Board (CPPIB) holds a controlling stake of over 75% in Informatica, declined to comment. CPPIB could not be reached for comment.

Founded in 1993, Informatica offers subscription-based data management services over the cloud and also helps to automate tasks for more than 5,000 active customers.

Based in Redwood City, California, its customers include Unilever and Deloitte, according to its website.

Informatica’s shares have risen nearly 43% so far this year, valuing the company at about $11.35 billion.

The company was taken private in 2015 for about $5.3 billion by a consortium that included Permira and CPPIB.

Six years later, Permira and CPPIB took Informatica public again and its shares were listed on the New York Stock Exchange.

If the deal goes through, it would be the biggest for Salesforce since it acquired workplace messaging app Slack Technologies in 2020 for nearly $28 billion.

Salesforce’s dealmaking strategy came under scrutiny in early 2023, when activist investors, including ValueAct Capital and Elliott Management, questioned the company’s strategy and pushed the management for changes.

In response, Salesforce implemented cost-cutting and increased share buybacks. It also disbanded its M&A board committee.

Salesforce has been a prolific acquirer. In 2019, it bought data analytics platform Tableau Software in an all-stock deal valued at $15.7 billion.

As part of the current enthusiasm for artificial intelligence sweeping through the technology sector, several large deals have been signed.

In January, design software company Synopsys agreed to buy smaller rival Ansys for about $35 billion. Hewlett Packard Enterprise struck a deal in January to buy networking gear maker Juniper Networks for $14 billion.

Technology accounted for the largest share of merger and acquisitions during the first quarter, jumping more than 42% year-on-year to about $154 billion, according to Dealogic.

(Reporting by Urvi Dugar, Utkarsh Shetti and Mrinmay Dey in Bengaluru; Editing by Stephen Coates and Barbara Lewis)