Salesforce Stock in Focus After Reports Company in Advanced Talks to Acquire Informatica

Shares in Salesforce (CRM) will be in focus Monday after a report late Friday that the customer relationship management software maker is in advanced discussions to acquire data-management software provider Informatica (INFA).

One potential roadblock to a transaction getting across the line surrounds the price being discussed, which is below Informatica’s Friday closing price of $38.48, people familiar with the matter told The Wall Street Journal, which first reported the story Friday evening. Informatica’s shares have gained 43% so far this year, valuing the company at around $11.36 billion.

A tie-up between the two companies would allow Salesforce to incorporate Informatica’s range of recently launched artificial intelligence (AI) tools into its suit of client relationship products and gain access to its 5,000 active customers that include consumer goods giant Unilever (UL), leading automaker Toyota (TM), and Big Four accounting firm Deloitte.

If a deal takes place, it would be Salesforce’s largest since it acquired workplace collaboration app Slack Technologies for $28 billion during the pandemic work-from-home boom in 2021. Prior to that transaction, the cloud software maker purchased data analytics platform Tableau Software in 2019 for $15.7 billion in an all-stock deal.

The company’s penchant for dealmaking came under scrutiny last year from activist investors, including ValueAct Capital and Elliot Management, leading it to disband its mergers and acquisitions (M&A) committee, introduce cost-cutting measures, and focus on profitability.

Technology deals accounted for the lion’s share of M&A activity in the first quarter, with transactions in the group jumping 42% from a year earlier to around $154 billion, fuelled by widespread enterprise AI adoption.

Since climbing to its record close in late February, the Salesforce share price has consolidated within a descending triangle—a chart pattern that technical analysts often interpret as preceding a move lower. If a breakdown from the triangle eventuates, investors should keep an eye on the $252 level, an area where the stock is likely to find buying support from a multi-month trendline and the rising 200-day moving average. However, a breakout above the pattern to a new all-time high (ATH) on above-average volume would likely see a continuation of the longer-term uptrend.

Salesforce shares finished last week at $294.32 and have gained about 50% over the past 12 months.

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As of the date this article was written, the author does not own any of the above securities.