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Salesforce decides against acquiring Informatica after investors express concerns

Despite initial interest from both parties, negotiations have slowed with the two companies struggling to agree on pricing, according to an unnamed source familiar with the matter. Informatica’s shares closed at $35.19 on Friday, showing the company’s market cap of around $10.5 billion, highlighting the substantial stakes involved in the potential deal.

The projected 35% increase in revenue for Informatica’s Cloud Subscription ARR business could potentially help to turn things around for Salesforce, should the deal go through. However, the impact of this growth on Salesforce, considering Informatica’s significantly smaller size overall, has clearly been playing on investors’ minds. Many have pointed out Salesforce’s fairly mediocre single-digit growth, projecting a 9% year-on-year growth for the upcoming fiscal year, down two percentage points from the previous year.

Opinions are divided as talks continue between Salesforce and Informatica, with both companies wrestling with mutual agreements and investor satisfaction. This underscores the delicate nature of large acquisition deals and the significant influence of third parties on such transactions.

Salesforce’s Informatica takeover on hold

At the same time, investors have raised concerns regarding the terms and effectiveness of the proposed takeover, leading to a downward trend in stock prices for both Salesforce and Informatica.

Should the acquisition proceed, it would be another addition to the companies Salesforce has acquired recently during its expensive spending spree. The California-based company acquired Slack in 2021 for over $27 billion and Tableau in 2019 for more than $15 billion.

Salesforce has found itself in a challenging position as discussions about an Informatica takeover encounter obstacles, as reported by Bloomberg. Talks have stalled as both companies find it challenging to reach mutually agreeable terms.

Many have been quick to point out the cloud-based software company’s fairly mediocre single-digit growth – the company projects a 9% year-on-year growth for the upcoming fiscal year, down two percentage points from last year.

Despite initial interest from both parties, negotiations have slowed with the two companies struggling to agree on pricing, according to the unnamed source. Informatica’s shares closed at $35.19 on Friday, giving the company a market cap of around $10.5 billion, which highlights the substantial stakes involved in the potential deal.

The projected 35% increase in revenue for Informatica’s Cloud Subscription ARR business could help to turn things around for Salesforce, should the deal go through, but how much impact that could have on Salesforce given Informatica’s considerably smaller size overall has clearly been playing on investors’ minds.

Opinions continue to be divided as talks continue between Salesforce and Informatica, as the two companies battle both mutual agreements and investor satisfaction, emphasizing the precarious nature of large acquisition deals and the weighty influence of third parties.

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