Salesforce Acquires Own for $1.9 Billion in Cash

Sales force announced Thursday that it will pay $1.9 billion in cash for Own Co., a startup that specializes in tools for backing up data in cloud-based applications. Salesforce plans to close the deal in the quarter ending January 2025 if regulators approve, according to a declare.

The startup, formerly known as OwnBackup, was valued at $3.35 billion in 2021. funding roundSalesforce Ventures, the cloud software company’s venture capital arm, invested in that round and previous ones.

The proposed deal would mark a return to big deals for Salesforce, less than two years after co-founder and CEO Marc Benioff said the board has been removed a committee on mergers and acquisitions.

Benioff’s comments come after investors aggressively bought Salesforce shares and raised questions about profitability after the company spent heavily on expensive assets, including MuleSoft and Slack, without delivering significant growth.

Own’s decline reflects a more sluggish landscape for software companies.

Investors became less interested in cloud software, which had seen a surge in adoption in 2020 thanks to post-Covid remote work policies, in late 2021. Central banks raised interest rates to stem inflation, pushing loss-making cloud companies to focus more on profitability. Enterprises looking to cut IT budgets consolidated their purchases, burdening single-product companies, including startups and public companies.

Anaplan, Avalara, Coupa, Everbridge, Qualtrics, Sumo Logic and Zendesk have all gone private.

Own, Salesforce’s customer support company, has been looking to diversify. In its 2021 funding announcement, the company touted its intention to partner with of Microsoft Dynamics enterprise software competes with Salesforce’s core applications. Support for Service now followed.

Salesforce has also revealed plans to acquire smaller startups in recent weeks. ForecastSpring And Tenyx.

Salesforce said the Own acquisition will not impact Salesforce’s shareholder return initiatives and said the deal will be accretive to free cash flow starting in the second year after the deal closes.

In April, the data management software maker Information technology said no in negotiations was acquired after media reports said Salesforce was interested in acquiring the company for around $10 billion.

“We will look at products organically, but, yes, we will continue to look at products inorganically,” Benioff told analysts on Salesforce’s May earnings call. “But as we’ve committed to you, if we were looking at a large-scale acquisition, we would make sure that it’s not dilutive to customer value, that it’s accretive, that it has the right metrics.”

CLOCK: Salesforce CEO Marc Benioff chats privately with Jim Cramer