Salesforce (NYSE: CRM) has agreed to buy business software company MuleSoft (NYSE: MULE) in a $6.5 billion cash and stock deal. This is Salesforce’s biggest acquisition to date. Salesforce has the distinction of having reached $10 billion in revenue faster than any software company ever. The company currently holds more than 18 percent of the global customer relationship management software market.
The company said it was paying $44.89 per share for MuleSoft. Shareholders would receive $36 in cash and 0.0711 shares of Salesforce common stock for each MuleSoft share. The deal represents a 36 percent premium over MuleSoft’s closing share price before the deal was announced. MuleSoft listed on the New York Stock Exchange on March 17 of last year at $17 per share.
MuleSoft makes software to help businesses networks run faster. Its technology creates a unified system out of customers’ business apps, databases, and corporate IT infrastructure. Salesforce CEO Marc Benioff said in a statement, “Together, Salesforce and MuleSoft will enable customers to connect all of the information throughout their enterprise across all public and private clouds and data sources, radically enhancing innovation.”
MuleSoft went public last year and made almost $300 million in revenue in fiscal 2017. In the company’s fourth quarter, it brought in $88.7 million in sales, which was a 60 percent increase from the same time period the previous year. Mulesoft also recorded an operating loss of $25.5 million in its fourth quarter, a nearly 100 percent jump from the $12.8 million operating loss recorded in the previous year.
MuleSoft has 1,200 customers, including Coca-Cola, Barclays, Airbus, AT&T, and Anheuser-Busch. The deal is expected to close at the end July if it can pass regulatory muster. BofA Merrill Lynch is Salesforce’s financial adviser and Goldman Sachs advised MuleSoft.
Salesforce is now focusing on expanding by acquiring companies that specialize in other products. Its last big deal was when it bought e-commerce system software company Demandware for $2.8 billion in 2016. Salesforce also bought the startup Quip, which makes a word processing product, in 2016 for $582 million.