M&A News: Salesforce-Informatica Deal Crumbles
CRM solutions provider Salesforce’s (NYSE:CRM) bid to acquire data management software provider Informatica (NYSE:INFA) has failed, the Wall Street Journal reported. Per the report, the negotiation crumbled due to disagreements regarding the terms and conditions of the deal.
Last week, the Journal reported that Salesforce is in talks to acquire Informatica for about $10 billion. However, the report also highlighted that the deal could fail as Salesforce’s acquisition offer amount was less than Informatica’s closing price of $38.48 on Friday, April 12.
Salesforce Stock Could Rise
Salesforce stock has dropped nearly 8.8% since news of the acquisition surfaced. The decline in CRM stock reflected investors’ apprehension about the company’s history of pricey acquisitions. Consequently, the failure of the deal is likely to be cheered by investors, potentially leading to an increase in its share price.
It’s worth noting that Salesforce has been broadening its portfolio through acquisitions. In 2022, it acquired Troops.ai, a provider of revenue communications solutions, and Phennecs, a company specializing in privacy, compliance, and data management solutions.
However, investor apprehension primarily revolves around Salesforce’s largest acquisitions: Slack Technologies and Tableau Software, which were substantial investments of $27.7 billion and $15.7 billion, respectively.
What Is the Future of CRM Stock?
CRM stock has increased approximately 39% in one year, reflecting its focus on accelerating top-line growth and driving margins. However, Wall Street remained cautiously optimistic about Salesforce stock.
CRM stock has a Moderate Buy consensus rating based on 28 Buys and 10 Hold recommendations. Analysts’ average price target on CRM stock is $338.61, implying 25.24% upside potential from current levels.
Among the analysts covering CRM stock, Terry Tillman of Truist Financial is the most accurate analyst covering the stock in a one-year timeframe, according to TipRanks. Copying Tillman’s trades on CRM stock and holding each position for one year could result in 83% of your transactions generating a profit, with an average return of 19.90% per trade.
