Salesforce (NYSE:CRM) CEO Marc Benioff is reportedly targeting Informatica (INFA) for what could be one of the company's largest acquisitions, reinforcing Salesforce's position in data integration and management.
First reported by the Wall Street Journal, discussions between Salesforce and Informatica have been ongoing and a deal could be announced within a week, although the timeframe could be extended and the negotiations might not result in an agreement.
INFA shares jumped 4% in premarket trading Monday while CRM dropped 2.5%.
The potential acquisition is significant as Informatica, valued at approximately $11.4 billion based on its last closing price in New York, is a direct competitor to Salesforce's third-largest acquisition, MuleSoft.
Analysts at Bloomberg Intelligence said in a note that this deal could drive further consolidation in the software-as-a-service (SaaS) sector and may draw regulatory attention.
Salesforce, under Benioff’s leadership, has recently grappled with challenges from activist investors like Elliott Investment Management, advocating for operational efficiencies.
Last year, the cloud-based software giant managed to avoid a proxy battle with Elliott following strategic adjustments and an increase in its stock price.
Meanwhile, Informatica has seen its shares rise 36% this year, with a market projection of increasing its revenue by about 6% to $1.7 billion for the fiscal year.
If the acquisition proceeds at a significant premium, it could approach or exceed the financial magnitude of Salesforce's previous major acquisitions, including the $14 billion purchase of Tableau Software in 2019 and the $27 billion acquisition of Slack Technologies in 2021.
Informatica's total enterprise value, including debt, exceeds $12 billion.