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June 1, 2016
martinwolf Transaction Analysis
Salesforce Acquires Demandware
 
Financial Information
  • Enterprise Value                                         $2.7 Billion
  • EV/LTM Revenue                                       10.5x
Transaction Facts
  • Salesforce.com, Inc. (NYSE:CRM) announced today that it has agreed to acquire Demandware, Inc. (NYSE: DWRE), a digital commerce company, at $75 per share (a 56% premium over Demandware's closing trading price on Tuesday of $48).
  • The transaction offers Salesforce an e-commerce platform used by leading brands including Lands' End, L'Oréal and Puma and others.
  • Salesforce expects the deal to increase its annual revenue $100 to $120 million, and increased its revenue guidance for FY17 to $8.26B to $8.32B from $8.16 to $8.20B.
  • The transaction is expected to close during Salesforce's Q2 2017 (before July 31, 2016).
Paying the Price to Stay Ahead
  • Looking Ahead to A Growing Market: Salesforce is already the clear market leader in CRM, and continuing its growth means expanding its offerings. Gartner estimates digital commerce platforms spending will have an annual growth rate of more than 14% to reach $8.5 billion in 2020 - the acquisition of Demandware, a leader in this space, will strengthen Salesforce's ability to capture this growing market.
  • High Demand Means High Price: Demandware's 56% premium indicates that Salesforce was not the only buyer in play - the company's high growth and attractive client portfolio would have attracted several cloud suitors such as Adobe Systems and Oracle.
  • New Space, New Opportunities: With this acquisition, Salesforce both expands its offerings and its customer base, enabling it to better leverage existing customers of both enterprises. In the ecommerce space it will find itself competing with other industry leaders, among them Amazon and eBay.
For more information about this transaction,  click here to read the press release.

martinwolf was not the advisor in this transaction.

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With offices in the San Francisco Bay Area, martinwolf is a leading M&A Advisory focused on middle market companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed more than 140 transactions in nineteen countries and sold seven divisions of Fortune 500 companies. 

 

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