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After a huge premium paid by Salesforce to acquire Tableau, the two key takeways from
this acquisition is:
“Data analytics is going to be the core of its offering going forward.”
“Data visualization as a technology stack was a key layer missing in its overall analytics
play.”
METHOD OF ACQUISITION
Acquisition of Tableau by Salesforce was an “All Stock Deal”. The terms all-stock deal and
all-paper deal are often used in reference to mergers and acquisitions. In this type of
acquisition, shareholders of the target company receive shares in the acquiring company
as payment, rather than cash.
Reason of all Stock Deals
All-stock deals may be used when shareholders of a target company prefer to obtain
ownership in the acquiring company rather than receive a cash settlement. They may also
be initiated by acquiring companies which want to buy out the investors of target
companies but do not have sufficient cash assets. In this case, paying shareholders in stock
is more affordable than paying investors in cash.
All-stock deals can be favorable for the shareholders of target companies if the merger is
successful and results in an increase in the value of the acquiring company’s stock.
However, because the value of shares can also decrease, all-stock deals involve more risk
for target company shareholders than all-cash deals.
VALUATION AND DETERMINATION OF DEAL SIZE
Upon completion of the merger, additional valuation work will be performed and any
increases or decreases in the fair value of assets acquired or liabilities assumed will result
in adjustments to the balance sheet or statement of operations until the purchase price
allocation is finalized. The following table summarizes the preliminary estimate of the
purchase consideration to be transferred as a result of the offer and the merger:
(in millions) Fair Value
Issuance of stock $ 15,483
Fair value of stock options and restricted stock awards assumed 262
$ 15,745
VALUATION AND DEAL SIZE
The preliminary estimated fair value of the stock options and restricted stock assumed by
Salesforce was determined using the Black-Scholes option pricing model. The share
conversion ratio applied to convert outstanding Tableau equity awards into equity awards
for Salesforce shares is calculated as follows:
(a) the number of shares of Salesforce common stock (rounded down to the nearest whole
share) determined by multiplying the number of shares of Tableau common stock subject
to such Tableau option immediately prior to the effective time of the offer and the merger
by 1.103 and (b) at an exercise price per share (rounded up to the nearest whole cent)
determined by dividing the per share exercise price of such Tableau option by 1.103.
The following table summarizes the preliminary estimated fair values of assets acquired
(in millions) Fair Value
and liabilities assumed as if the acquisition occurred on April 30, 2019:
Net assets acquired $ 1,798
Intangible assets 4,281
Goodwill 10,870
Net liabilities assumed (690)
Deferred tax liability (514)
Under the terms of the merger agreement, Salesforce is offering to exchange for each
outstanding share of Tableau Class A common stock and Tableau Class B common stock,
1.103 shares of Salesforce common stock, together with cash in lieu of any fractional
shares of Salesforce common stock, without interest and subject to reduction for any
applicable withholding taxes. Number of Shares of Number of Shares of
Tableau Common Stock Salesforce Common
Name Beneficially Owned Stock for Shares Total Value of Shares(1)
Adam Selipsky 8,725 9,623 $ 1,551,901
Christian Chabot 2,349,598 2,591,606 $ 417,948,300
Patrick Hanrahan 6,863,170 7,570,076 $ 1,220,826,157
Christopher Stolte 1,141,661 1,259,252 $ 203,079,570
William Bosworth 9,153 10,095 $ 1,628,021
Elliott Jurgensen, Jr. 2,722 3,002 $ 484,133
Hilarie Koplow-McAdams 5,549 6,120 $ 986,972
Gerri Martin-Flickinger 1,452 1,601 $ 258,193
John McAdam 16,835 18,569 $ 2,994,623
Brooke Seawell 31,297 34,520 $ 5,567,040
Damon Fletcher 2,861 3,155 $ 508,807
Keenan Conder 45,069 49,711 $ 8,016,893
Dan Miller 10,255 11,311 $ 1,824,125
Mark Nelson 12,113 13,360 $ 2,154,567
KEY FINANCIAL TERMS
https://www.sec.gov/Archives/edgar/data/1108524/000119312519188682/d82079ds4.htm?
mod=article_inline#toc82079_16
https://analyticsindiamag.com/why-salesforce-acquired-tableau/
https://investor.salesforce.com/press-releases/press-release-details/2019/Salesforce-Compl
etes-Acquisition-of-Tableau/default.aspx
https://www.tableau.com/about/press-releases/2019/salesforce-completes-acquisition-table
au
https://s23.q4cdn.com/574569502/files/doc_financials/2019/Q3/CRM-Q3-FY19-Earnings-Pres
s-Release-w-financials.pdf
https://s23.q4cdn.com/574569502/files/doc_financials/2019/Q4/CRM-Q4-FY19-Earnings-Pres
s-Release-w-financials.pdf
https://www.tableau.com/about/press-releases/2019/salesforce-completes-acquisition-table
au
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