Salesforce to acquire Informatica for $8 billion in AI-focused data push

Salesforce announced on Tuesday that it will acquire Informatica for approximately $8 billion, marking its biggest deal since acquiring Slack Technologies in 2021. The move signals a return to large-scale mergers and acquisitions for the cloud software giant as it looks to strengthen its capabilities in the rapidly evolving artificial intelligence market.After previously shelving talks with Informatica last year due to disagreements over terms, Salesforce is now betting that the data management platform can enhance its competitiveness in the AI space. The deal, valued at $25 per share, represents a roughly 30% premium to Informatica’s closing price on May 22, the day before news of renewed negotiations surfaced.Shares of Informatica rose 5.8% in premarket trading to $23.86, while Salesforce was up 1.2%.Buying Informatica will allow Salesforce to expand its suite of data management tools and tighten control over how business data is handled—an increasingly critical factor as the company integrates generative AI across its product offerings, Reuters reported."Salesforce and Informatica will create the most complete, agent-ready data platform in the industry," said Salesforce CEO Marc Benioff, emphasizing that the acquisition will enhance the company’s position in the $150 billion-plus data enterprise market.Salesforce has been actively developing AI agents—software programs capable of handling routine tasks without human intervention—for applications like recruiting and customer service. Its AI platform, Agentforce, has already secured more than 1,000 paid customer deals.Scotiabank analysts noted that the acquisition could help Salesforce better compete with other major software providers, pointing out that "data management software is now most often sold as part of mega-vendor tool kits."The deal will be financed through a combination of cash and new debt, with Salesforce expecting to complete the transaction early in its next fiscal year starting February. The company also anticipates the acquisition will begin contributing to operating margin improvements from the second year after closing.Salesforce has a history of high-profile acquisitions, including its $15.7 billion purchase of data analytics firm Tableau Software in 2019. However, those moves came under increased scrutiny in 2023 from activist investors like ValueAct Capital and Elliott Management, who pushed for improved profitability.(This is a top Google Trends topic)