Salesforce $8B Acquisition of Informatica
5/27/25
Overview of the Deal
Acquirer: Salesforce (NYSE: CRM)
Founded: March 8, 1999 (San Francisco, CA)
CEO: Marc Benioff
Employees: 76,452
Market Cap: $61.17B
LTM Revenue: $37.90B
Target: Informatica (NYSE: INFA)
Founded: 1993 (Redwood City, CA)
CEO: Amit Walia
Employees: 5,200
Market Cap: $2.31B
LTM Revenue: $16.40B
Total Transaction Value: $8B
Acquirer Advisors: J.P. Morgan Securities LLC (Financial), Wachtell, Lipton, Rosen & Katz, and Morrison & Foerster LLP (Legal)
Target Advisors: Goldman Sachs & Co. LLC (Financial), Latham & Watkins LLP, and Fenwick & West LLP (Legal)
On May 27, 2025, Salesforce and Informatica announced they had come to an agreement in which Salesforce will acquire Informatica for $8 billion. Current terms establish that holders of Informatica Class A and B-1 common stock will receive $25 per share held.
Salesforce is an American cloud-based software company. It provides various services, including sales, customer service, marketing automation, e-commerce, and AI, to name a few. Its primary offering is customer relationship management (CRM) services is ranked #1 in the world.
Informatica is a leader in AI-powered enterprise cloud data management. It's an intelligent data management cloud (IDMC) that delivers a complete suite of industry-leading cloud solutions. It has amassed over 5,000 customers in over 100 countries, including over 80 of the Fortune 100 companies.
This strategic acquisition will enhance Salesforce’s trusted data foundation. The combination of Informatica’s rich catalog and metadata management with Salesforce’s platform will enable all AI agents to operate efficiently and be scaled across all modern enterprises. Effective, enterprise-grade AI requires more than just data. The three main components include:
- Data Transparency
- Data Understanding
- Data Governance
"Joining forces with Salesforce represents a significant leap forward in our journey to bring data and AI to life by empowering businesses with the transformative power of their most critical asset — their data. We have a shared vision for how we can help organizations harness the full value of their data in the AI era.” - Amit Walia (CEO of Informatica)
Integration Outlook
Short-Term:
Salesforce’s acquisition is meant to bolster its capabilities in a race to effectively use artificial intelligence in the workplace. The addition of Informatica’s cloud capabilities will strengthen Salesforce’s data offering, a complete solution to AI challenges. This will provide immense value to customers who are looking for a trustworthy and actionable AI service. Many providers struggle with personalized offerings, governance, and context. This acquisition will eliminate all these struggles, solidifying Salesforce's leading position.
However, the deal could spark competitive pressure, prompting rivals to move quickly through their own M&A. Salesforce must move quickly to establish its platform and position in the evolving AI space. Failure to do so could disappoint users and drive them to more agile AI startups, where low barriers to entry in the industry allow for rapid innovation, making switching costs very minimal.
Investors seemed excited by this proposed acquisition as Informatica shares jumped by close to 6%. Salesforce shares are down 18% on the year, yet after the announcement, they rose by roughly 0.6%.
Long-Term:
This acquisition shows signs of positive growth strategically and financially. The platform could become the go-to for companies seeking a complete AI cloud offering. The challenge lies in staying ahead of competition that is constantly evolving. The combination of Salesforce’s CRM and AI capabilities with Informatica’s data integration and governance tools, the company is positioning itself to address the previously mentioned enterprise challenges.
The challenge is staying ahead of giants like Microsoft and Google. These companies are also investing heavily in AI infrastructure and data platforms. To sustain momentum, it must demonstrate clear ROI to all its customers. If successful, this could ensure Salesforce is the go-to for enterprise AI.
Risks and Uncertainties:
This promising move doesn’t come without questions. Salesforce previously attempted to acquire Informatica in 2024 for $10 billion, but fell through due to disagreement over terms. Following that announcement, Informatica’s stock performed poorly. This time, the offer comes at a 34% discount compared to 2024, which provides great value for Salesforce. However, Informatica may push back, feeling undervalued for its business. This could cause issues as Salesforce may not want to continue spending more, considering it has made over $50 billion in acquisitions over the past 6 years, excluding this one.
Informatica is also carrying roughly $1.9 billion in debt, which could raise concerns depending on maturity timelines and post-acquisition cash flow generation. Salesforce plans on financing this acquisition with a mix of debt and cash on hand, and its $14 billion in cash on hand (as of January 31, 2025) should give it enough flexibility to manage the deal without putting strain on its balance sheet.
Finally, this acquisition faces some regulatory scrutiny, given ongoing consolidation in AI and cloud data markets. This could cause the acquisition to be pushed back or face the worry of being turned down.
Overall, while the deal is compelling, Salesforce must navigate concerns and integrate the platforms efficiently in order to ensure long-term success.