Salesforce in Advanced Talks to Buy Informatica

Salesforce is in advanced talks to acquire data-management software provider Informatica, according to people familiar with the matter.

Redwood City, Calif.-based Informatica has a market capitalization of more than $11 billion after a 43% run-up in its shares this year as traders bet on a deal.

One potential complicating factor: The price that was being discussed is below Informatica’s Friday closing stock price of $38.48 as a result of the recent jump.

San Francisco-based Salesforce specializes in cloud-based software that helps sales staff manage customer relationships.

Informatica helps companies manage their data across cloud and on-premise systems, allowing organizations to better analyze the data they collect. It counts companies ranging from Unilever to Toyota and Deloitte as customers, according to its website.

Informatica has recently launched new tools building on its artificial-intelligence capabilities as an AI craze sweeps across the tech industry. Last year it debuted Claire GPT, a generative AI tool to help companies handle data.

Salesforce has historically had a voracious appetite for deals, having made over 70 acquisitions since 2006, according to data from FactSet.

A deal for Informatica would rank among Salesforce’s largest and be its biggest since it closed the roughly $28 billion acquisition of workplace-collaboration products company Slack Technologies in 2021. Slack was Salesforce’s biggest acquisition ever. A few years prior, Salesforce agreed to buy data-analytics platform Tableau Software for more than $15 billion.

Salesforce’s approach to dealmaking drew a swarm of at least five activist investors last year including Elliott Investment Management and Starboard Value.

To appease the activists, Salesforce said that it disbanded a committee focused on M&A, as it turned its focus toward improving profitability and operations. It also named ValueAct Capital Chief Executive Mason Morfit to its board along with two other new members.

Elliott had been gearing up for a proxy battle but backed down after Salesforce unveiled cost cuts and bigger share buybacks, among other measures.

That and the prospect of AI enhancing its product offerings has helped Salesforce stock rebound sharply since late 2022. It has notched a further increase of roughly 15% so far this year, bringing Salesforce’s market capitalization to roughly $285 billion.

Marc Benioff once again became the company’s sole CEO in early 2023, after Bret Taylor vacated his co-CEO position. Taylor had earlier shared the top role with Benioff for about a year.

Benioff has been grappling with how to curb the business’ deceleration after a pandemic-fueled boom in 2021. In February, Salesforce guided toward lower-than-expected revenue growth this year, in part because of a weakness in professional services.

Private-equity firm Permira and the Canadian Pension Plan Investment Board in 2015 took Informatica private in a transaction valued at $5.3 billion after roughly 15 years as a public company. The business went public again in 2021.

Tom Dotan contributed to this article.

Write to Lauren Thomas at [email protected], Laura Cooper at [email protected] and Dana Cimilluca at [email protected]