Salesforce held talks to buy the workplace messaging app Slack, according to a new report from the Wall Street Journal.
There is no guarantee that the preliminary talks will lead to an acquisition, according to the report, but a deal would signal the cloud giant’s more aggressive foray into office communication. Currently, Salesforce has two communication and collaboration tools, Chatter and Quip, which can be used in tandem with its customer management-focused tools.
The move would represent Salesforce’s largest acquisition in its history, as Slack’s market capitalization at at about $17 billion prior to the report, and the acquisition price would likely be higher. Slack’s stock surged as much as 32% on the news while Salesforce shares were down about 3.5%. Neither company was immediately available for comment.
This would also continue Salesforce’s acquisition spree of late. The customer management software provider has made two large acquisitions in the last few years: It bought data visualization company Tableau for over $15 billion in 2019 and MuleSoft for $6.5 billion in 2018.
On the company’s most recent quarterly earnings call in August, CEO Marc Benioff notably said that he didn’t “really see an M&A environment” for large companies like his at this time. He also said Salesforce is focused on integrating its MuleSoft and Tableau acquisitions this year.
However, Salesforce has made a few smaller acquisitions so far in 2020, buying Vlocity for $1.3 billion in February and marketing network The CMO Club for an undisclosed amount in early March.
Analysts have recently speculated that Salesforce may need to rely on acquisitions to keep up its rapid pace of growth, with a UBS analyst note saying that the firm was suffering from a “lack of innovation.”
Salesforce and Slack have a preexisting partnership since 2016, and expanded it last year so users can move more seamlessly between both cloud services.
Both companies compete with Microsoft, Salesforce with Microsoft’s customer relationship management tools, and Slack with Microsoft Teams, its chat and collaboration app. A merger could potentially position both companies as a stronger competitor to Microsoft.