Salesforce Agrees To Acquire Demandware For $75 Per Share Or Approximately $2.8b

Salesforce (CRM) and Demandware (DWRE) announced that they have entered into a definitive agreement under which Salesforce will acquire Demandware in a transaction worth approximately $2.8B. Under the terms of the agreement, Salesforce will commence a tender offer for all outstanding shares of Demandware for $75.00 per share, in cash.

The transaction is expected to close in the second quarter of Salesforce's fiscal year 2017, ending July 31, 2016. Under the terms of the transaction, Salesforce will commence a tender offer to acquire all of the outstanding shares of Demandware for $75.00 per share in cash. The transaction is expected to close in the second quarter of Salesforce's fiscal year 2017, ending July 31, 2016. It is subject to the satisfaction of customary closing conditions, including the acceptance of a majority of Demandware shares in the tender offer and expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Following the successful completion of the tender offer, Demandware shares not tendered in the tender offer will be converted in a second step merger into the right to receive the same $75.00 per share in cash paid in the tender offer. The acquisition is expected to increase Salesforce's FY17 total revenue by approximately $100 million to $120 million. This estimate reflects an approximately $50 million reduction relating to fair value adjustments to deferred revenue and unbilled deferred revenue, adjustments related to the combined customer base, and inter-company revenue elimination.

The acquisition is expected to decrease FY17 non-GAAP diluted EPS by approximately 7c. This estimate reflects standard integration costs and transaction fees expected to be in the range of $30 million. The acquisition is expected to increase Salesforce's Q2 FY17 total revenue by approximately $0 million to $10 million. Transaction fees related to the acquisition are expected to reduce Q2 FY17 diluted non-GAAP EPS by approximately 3c.
 

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