Cloud computing company
) recently entered into a definitive agreement to acquire
"relationship-intelligence" company RelateIQ Inc, for approximately
As a result of this agreement, Salesforce will acquire all
outstanding shares of RelateIQ for $350 million, and the remaining
$40 million will be paid in cash.
RelateIQ is a relationship intelligence platform that combines data
from email systems, calendars and smartphone calls and provides
data insights on a real-time basis. Post-acquisition, RelateIQ will
be a wholly-owned subsidiary of Salesforce. This acquisition
provides Salesforce the platform to build its marketing
We believe that the acquisition will not only enhance process
efficiency of both companies, but it will also make the CRM
platform more competent in handling sales, marketing and service
The data-mining technologies of RelateIQ will empower Salesforce to
create a strong marketing platform throughout the email, social
networking platform and the web. This acquisition will also boost
customers' marketing efforts through email, mobile devices as well
as the social media.
Salesforce has made a number of acquisitions of late, with the
intention of diversifying its offerings and expanding its markets.
Its strong cash balance ($879.1 million) and robust operating cash
flow ($473.1 million in the third quarter of 2014) enable the
company to go for strategic acquisitions.
We also remain encouraged by the rising number of deal wins at
Salesforce and the rapid adoption of its cloud-based solutions.
Overall, the company's diverse cloud offerings and strong spending
on digital marketing remain the positives. Moreover, the company's
strategic acquisitions and the resultant synergies are expected to
remain long-term positives.
Although the company is growing reasonably in the cloud market,
growth prospects have been tempered by competition from
). Currency headwinds and increase in investments could pose
Currently, Salesforce has a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
SALESFORCE.COM (CRM): Free Stock Analysis
INTL BUS MACH (IBM): Free Stock Analysis Report
SAP AG ADR (SAP): Free Stock Analysis Report
ORACLE CORP (ORCL): Free Stock Analysis Report
To read this article on Zacks.com click here.