Shares of Braze surged in Tuesday’s trade on October 20, rallying 52% to a 22-month high of $45.59 apiece on the Nasdaq after Salesforce (CRM) agreed to acquire the customer-engagement software company, handing existing investors a major windfall.
For Braze, the strategic attraction extends beyond the purchase price. Joining Salesforce Inc. could give the technology much broader distribution and greater resources for product development.
Following the meteoric rally, Braze stock is trading at roughly three times its late-February price.
Salesforce to acquire Braze in $5.66 billion deal
Salesforce said on Tuesday that it would acquire Braze in a deal valued at about $5.66 billion, valuing Braze shares at $47.50 apiece and representing a 58.1% premium over the stock’s previous closing price. The company expects the all-cash transaction to close in fiscal 2028, subject to the necessary approvals.
New York-based Braze gathers customer data in real time and uses artificial intelligence (AI) to generate personalized messages across different channels and communication platforms, including mobile apps, websites, email, and text messaging.
The company serves around 2,770 customers, including Canva, Equinox, Instacart, and Venmo, according to the statement.
Salesforce bets on AI to strengthen its software business
The deal marks Salesforce’s latest move to accelerate its AI transition as investors worry that the rapid adoption of the technology could erode demand for traditional software. Salesforce will use Braze’s technology to bolster several of its products, particularly those focused on marketing and customer communication through Agentforce, its flagship AI platform.
The deal also reinforces Salesforce’s return to a strategy of serial software acquisitions.
Since the start of last year, the San Francisco-based company has also acquired Fin for $3.6 billion, Contentful for $1.5 billion and Informatica for $8 billion. Salesforce had taken a break from major acquisitions after activist investors pushed back against the strategy around the beginning of 2023, Bloomberg reported.
Salesforce’s marketing unit has been struggling, posting several recent quarters of largely flat or declining growth.
Customers are beginning to use a major new update to the offering that includes agentic AI features and will be strengthened by the Braze acquisition, Salesforce executives said during a call on Tuesday.
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