Salesforce . com Inc.’s planned purchase of workplace-collaboration software pioneer Slack Technologies Inc. was prompted by the pandemic, but its success will hinge on whether it delivers in the post-lockdown world.
Salesforce for years had explored potential deals with Slack, including investing in the company, according to people familiar with the talks. But it wasn’t until Covid-19 sent millions of people home to work remotely that Salesforce came to terms with the app maker—agreeing to pay more than 50% above Slack’s closing price the day before The Wall Street Journal broke news of the talks.
Salesforce Chief Operating Officer Bret Taylor, one of the architects of the $27.7 billion deal, including cash and debt, said that how its customers and the wider business world reacted to the health crisis, by more rapidly adopting digital tools, drove the two companies together.
“The technology that Slack made felt more relevant than ever before. That really motivated us to get into these discussions now,” Mr. Taylor said in an interview.
The deal will transform Salesforce into one of the largest players in business software, and, analysts say, help turn it into a more formidable opponent against Microsoft Corp. , which has been pushing its Teams software suite—which includes Slack-like functions—as a new operating system for companies.