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Salesforce (CRM) on an Acquisition Spree, Buys Gravitytank
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Keeping with its strategy of growing through acquisitions, salesforce.com Inc. (CRM - Free Report) recently bought Chicago-based consulting agency, Gravitytank. The deal was disclosed through a blog posted by one of the partners of Gravitytank, Mr. Shailesh Patel — a news that was later confirmed by Salesforce’s spokesperson. However, financial terms of the deal have not been disclosed.
What Makes Gravitytank Special
For the past couple of year, Salesforce has been aggressively acquiring companies that operating mostly in the software and artificial intelligence space, such as Demandware, BeyondCore and MetaMind among others. However, the Gravitytank buyout stands apart from all those deals.
Founded in 1999, Gravitytank is an innovation consultancy company that helps brands to expand their businesses. The company has worked with various brands across a number of industries including financial services, consumer packaged goods, consumer electronics and digital technology.
The company’s clients include Goodyear, Office max, Bill and Melinda Gates Foundation, among a host of others. As per Gravitytank's website, it employs over 70 consultants, of whom one-third are teachers at various universities.
We believe that Salesforce’s main motive behind acquiring Gravitytank is the latter’s massive engineering talent pool.
The acquisition is expected to help Salesforce design and develop better software solutions to help customers across various industries to connect with partners, clients and employees in newer and more innovative ways.
Acquisitions have always been one of Salesforce’s key growth strategies. In the last one and half years, the company has closed a number of takeovers worth a combined deal value of over $4 billion.
This year alone, the company has completed or is in the middle of as many as eleven acquisition deals, including its biggest ever buyout – Demandware – concluded this July.
Salesforce’s Chief Executive Officer (CEO), Marc Benioff, during the company’s last earnings conference call, hinted that the company might continue to be on an acquisition spree throughout the rest of the year.
According to Benioff, "This M&A window, I talked about that I think on the last call, openly in the press, seems to have opened for the year. I think it will probably close, probably at the end of this calendar year. But it's been incredible time for us to acquire some phenomenal assets”.
Notably, Gravitytank marks Salesforce’s third acquisition this month.
We believe that Salesforce’s sustained focus on expanding its business through strategic acquisitions and investments will drive growth over the long run.
Successful integration of the Gravitytank acquisition should enable the company engineer new and innovative products and solutions.
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).
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Salesforce (CRM) on an Acquisition Spree, Buys Gravitytank
Keeping with its strategy of growing through acquisitions, salesforce.com Inc. (CRM - Free Report) recently bought Chicago-based consulting agency, Gravitytank. The deal was disclosed through a blog posted by one of the partners of Gravitytank, Mr. Shailesh Patel — a news that was later confirmed by Salesforce’s spokesperson. However, financial terms of the deal have not been disclosed.
What Makes Gravitytank Special
For the past couple of year, Salesforce has been aggressively acquiring companies that operating mostly in the software and artificial intelligence space, such as Demandware, BeyondCore and MetaMind among others. However, the Gravitytank buyout stands apart from all those deals.
Founded in 1999, Gravitytank is an innovation consultancy company that helps brands to expand their businesses. The company has worked with various brands across a number of industries including financial services, consumer packaged goods, consumer electronics and digital technology.
The company’s clients include Goodyear, Office max, Bill and Melinda Gates Foundation, among a host of others. As per Gravitytank's website, it employs over 70 consultants, of whom one-third are teachers at various universities.
We believe that Salesforce’s main motive behind acquiring Gravitytank is the latter’s massive engineering talent pool.
The acquisition is expected to help Salesforce design and develop better software solutions to help customers across various industries to connect with partners, clients and employees in newer and more innovative ways.
SALESFORCE.COM Price
SALESFORCE.COM Price | SALESFORCE.COM Quote
Bottom Line
Acquisitions have always been one of Salesforce’s key growth strategies. In the last one and half years, the company has closed a number of takeovers worth a combined deal value of over $4 billion.
This year alone, the company has completed or is in the middle of as many as eleven acquisition deals, including its biggest ever buyout – Demandware – concluded this July.
Salesforce’s Chief Executive Officer (CEO), Marc Benioff, during the company’s last earnings conference call, hinted that the company might continue to be on an acquisition spree throughout the rest of the year.
According to Benioff, "This M&A window, I talked about that I think on the last call, openly in the press, seems to have opened for the year. I think it will probably close, probably at the end of this calendar year. But it's been incredible time for us to acquire some phenomenal assets”.
Notably, Gravitytank marks Salesforce’s third acquisition this month.
We believe that Salesforce’s sustained focus on expanding its business through strategic acquisitions and investments will drive growth over the long run.
Successful integration of the Gravitytank acquisition should enable the company engineer new and innovative products and solutions.
Zacks Rank & Key Picks
Salesforce carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader technology sector are Ambarella, Inc. (AMBA - Free Report) , Broadcom Limited (AVGO - Free Report) and Cirrus Logic Inc. (CRUS - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>