Dear SaaStr: Has Salesforce Overpaid for its Acquisitions, Including the $27.7 Billion Acquisition of Slack?

Possibly, but it probably doesn’t matter all that much. Why?

It needed them. It needed its top acquisitions to keep growing.  They worked:

Mulesoft, Tableau, Slack, ExactTarget, etc have all become core businesses that are necessary for Salesforce to grow.

It’s now growing < 10% A year even with these billion+ additional revenue streams. Without them? It would be far smaller if nothing else. And growing more slowly.

In acquisitions, what’s much more important is that a few deals really perform over time. The exact price seems like a big deal at the time, and it is, and matters from the perspective of cash, dilution, etc. But in the end price probably matters far more than if the acquired company has a big, material outcome at scale.


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