Salesforce Signs Definitive Agreement to Acquire Own Company

Rhea-AI Summary

Salesforce (NYSE: CRM) has announced a definitive agreement to acquire Own Company, a leading provider of data protection and data management solutions, for approximately $1.9 billion in cash. This acquisition aims to enhance Salesforce's platform with industry-leading data protection and management services, addressing the growing need for data security, privacy, and compliance.

Key points:

• Own Company is trusted by nearly 7,000 customers to safeguard mission-critical data
• The acquisition is expected to close in Q4 of Salesforce's fiscal year 2025
• Salesforce anticipates accretion on a free cash flow basis starting in the second year post-closing
• The transaction will not impact Salesforce's capital return program or FY2025 financial guidance

Positive

• Acquisition of Own Company for $1.9 billion enhances Salesforce's data protection and management capabilities
• Addition of nearly 7,000 customers from Own Company expands Salesforce's customer base
• Strengthens Salesforce's position in data security, privacy, and compliance solutions
• Expected accretion on free cash flow basis starting in the second year after closing
• No impact on Salesforce's FY2025 financial guidance or capital return program

Negative

• Large cash outlay of $1.9 billion for the acquisition
• Integration challenges and costs associated with merging Own Company's operations
• Potential regulatory hurdles in obtaining required approvals for the transaction

Insights

Financial Analyst

Salesforce's $1.9 billion acquisition of Own Company is a strategic move to bolster its data security offerings. This deal, expected to close in Q4 FY2025, shows Salesforce's commitment to addressing growing concerns around data protection and AI-driven insights. The transaction is cash-neutral in the short term, with no impact on FY2025 guidance or capital return programs. However, it's projected to be accretive to free cash flow from the second year post-closing, indicating potential long-term financial benefits. With Own's 7,000 customer base, Salesforce stands to expand its market share in the critical data protection sector, potentially driving future revenue growth and enhancing its competitive position in the CRM space.

Tech Expert

This acquisition significantly enhances Salesforce's data security portfolio. Own's expertise in data protection, archiving and analytics complements Salesforce's existing offerings like Backup, Shield and Data Mask. The integration of Own's capabilities will create a more comprehensive data protection suite, addressing critical needs in system failure prevention, human error mitigation and cybersecurity. Importantly, this move aligns with the increasing demand for robust data management in AI-driven environments. By incorporating Own's technology, Salesforce is positioning itself to offer more sophisticated tools for leveraging historical data for AI-driven insights, potentially giving its customers a competitive edge in data-driven decision-making.

Market Research Analyst

Salesforce's acquisition of Own Company is a strategic response to shifting market dynamics. With increasing data breaches and stricter regulations, the demand for comprehensive data protection solutions is surging. This move allows Salesforce to capture a larger share of this growing market. The deal also addresses the emerging need for AI-ready data management tools, a critical factor as businesses increasingly rely on AI for competitive advantage. By integrating Own's capabilities, Salesforce is not just expanding its product offerings but also positioning itself as a one-stop solution for CRM, data protection and AI-driven insights. This could potentially increase customer retention and attract new clients, especially in highly regulated industries where data compliance is paramount.

The proposed transaction underscores Salesforce’s commitment to strengthening data security, privacy, and compliance across its platform

The #1 AI CRM will enhance its platform with an industry-leading provider of data protection and data management services to ensure the availability, security, and compliance of customer data

Own Company is trusted by nearly 7,000 customers to safeguard mission-critical data

SAN FRANCISCO--(BUSINESS WIRE)-- Salesforce (NYSE: CRM), the world's #1 AI CRM, today announced it has signed a definitive agreement to acquire Own Company, a leading provider of data protection and data management solutions. Own empowers organizations to ensure the availability, security, and compliance of mission-critical data, while unlocking new ways to gain deeper insights from this data. Under the terms of the agreement, Salesforce will acquire Own for approximately $1.9 billion in cash, net of the value of the approximately 10% of outstanding shares currently owned by Salesforce, subject to customary purchase price adjustments.

"Data security has never been more critical, and Own’s proven expertise and products will enhance our ability to offer robust data protection and management solutions to our customers,” said Steve Fisher, President and GM, Einstein 1 Platform and Unified Data Services. “This proposed transaction underscores our commitment to providing secure, end-to-end solutions that protect our customers’ most valuable data and navigate the shifting landscape of data security and compliance.”

“We’re excited to join forces with Salesforce, a company that shares our commitment to data resilience and security,” said Sam Gutmann, Own CEO. “As digital transformation accelerates, our mission has expanded from preventing data loss in the cloud to helping customers protect their data, unlock business insights, and accelerate AI-driven innovation. Together with Salesforce, we’ll deliver even greater value for our customers by driving innovation, securing data, and ensuring compliance in the world’s most complex and highly regulated industries.”

As a Salesforce AppExchange partner since 2012 and a Salesforce Ventures portfolio company, Own has grown beyond its initial backup and recovery offerings, and today is trusted by nearly 7,000 customers to safeguard mission-critical data. The Own Data Platform provides data archiving, seeding, security, and analytics capabilities that help customers ensure the availability, compliance, and security of their mission-critical SaaS data. Own also helps organizations leverage their historical data to optimize decision-making and gain a competitive advantage.

Addressing a Growing Need for Data Security

The acquisition comes at a time when customers are increasingly focused on mitigating data loss due to system failures, human error, and cyberattacks. The advent of AI has made customers even more aware of the need to protect and manage access to data. By investing more deeply in pure cloud-native data protection solutions, Salesforce aims to accelerate the growth of its Platform Data Security, Privacy, and Compliance products.

Own’s capabilities will complement Salesforce's existing offerings, such as Salesforce Backup, Shield, and Data Mask. This will enable Salesforce to offer a more comprehensive data protection and loss prevention set of products, further reinforcing its commitment to providing secure, end-to-end solutions. These solutions are essential for protecting customers' most valuable assets—their data—and for deriving the most value from their historical data by leveraging AI to understand trends and forecast future growth.

Transaction Details

The transaction is expected to close in the fourth quarter of Salesforce’s fiscal year 2025, subject to customary closing conditions, including the receipt of required regulatory approvals. Based on the expected timing of closing of the transaction, there is no anticipated change to Salesforce’s fiscal year 2025 financial guidance, previously announced on August 28, 2024. The transaction will not impact Salesforce’s capital return program. Salesforce expects to achieve accretion on a free cash flow basis starting in the second year following the closing of the transaction and continuing thereafter.

Forward-Looking Statements

This press release contains forward-looking information related to Salesforce, Own Company and the acquisition of Own Company by Salesforce that involves substantial risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements in this report include, among other things, statements about the potential benefits of the proposed acquisition and its lack of impact on previously announced guidance and our capital return program, Salesforce’s plans, objectives, expectations and intentions, the financial condition, results of operations and business of Salesforce and the anticipated timing of the closing of the proposed acquisition. Risks and uncertainties include, among other things, risks related to the ability of Salesforce to close the proposed acquisition on a timely basis or at all; the ability to realize the anticipated benefits of the proposed acquisition, including the possibility that the expected benefits from the proposed acquisition will not be realized within the expected time period or at all; negative effects of the announcement of the proposed acquisition on the market price of Salesforce’s common stock or on the its operating results; transaction costs; unknown liabilities; the risk of litigation or regulatory actions related to the proposed acquisition; and the effect of general economic and market conditions.

Further information on these and other factors that could affect Salesforce’s financial and other results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings Salesforce makes with the Securities and Exchange Commission from time to time, including the Salesforce’s most recent Form 10-K. These documents are available on the SEC Filings section of the Investor Relations section of Salesforce’s website at www.salesforce.com/investor. Salesforce assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240905452826/en/

Carolyn Guss

cguss@salesforce.com

Source: Salesforce

FAQ

What is the value of Salesforce's acquisition of Own Company?

Salesforce (CRM) is acquiring Own Company for approximately $1.9 billion in cash, net of the value of the approximately 10% of outstanding shares currently owned by Salesforce.

How many customers does Own Company currently serve?

Own Company is trusted by nearly 7,000 customers to safeguard their mission-critical data.

When is the Salesforce-Own Company acquisition expected to close?

The transaction is expected to close in the fourth quarter of Salesforce's fiscal year 2025, subject to customary closing conditions and regulatory approvals.

Will the acquisition of Own Company affect Salesforce's (CRM) financial guidance for FY2025?

No, there is no anticipated change to Salesforce's fiscal year 2025 financial guidance as a result of this acquisition.

What is the main purpose of Salesforce (CRM) acquiring Own Company?

The acquisition aims to enhance Salesforce's platform with industry-leading data protection and management services, strengthening its offerings in data security, privacy, and compliance.