The combination of ExactTarget with Salesforce will create the market
and technology leader in marketing
leading cloud marketing platform, is used by more than 6,000 companies
including Coca-Cola, Gap and Nike to manage their digital marketing
SAN FRANCISCO & INDIANAPOLIS--(BUSINESS WIRE)--Jun. 4, 2013--
Salesforce.com (NYSE: CRM), the world’s #1 CRM platform (http://www.salesforce.com/),
and ExactTarget (NYSE: ET), a leading cloud marketing platform, today
announced that they have entered into a definitive agreement under which
salesforce.com will acquire ExactTarget in a transaction valued at
approximately $2.5 billion. Under the terms of the agreement,
salesforce.com will commence a tender offer for all outstanding shares
of ExactTarget for $33.75 per share, in cash. The transaction has been
unanimously approved by the Boards of Directors of both companies.
Salesforce.com’s acquisition of ExactTarget will further its mission of
being the world’s leading CRM platform—one that enables companies to
transform how they connect with their customers across sales, service,
and marketing. By combining ExactTarget’s leading digital marketing
capabilities with salesforce.com’s leading sales, service and social
marketing solutions, salesforce.com will create a world-class marketing
platform across email, social, mobile and the web.
The dramatic increase in consumer and business use of social networks,
mobile devices, and new digital technologies is causing a revolution in
marketing, as budgets previously spent on traditional media are now
moving to digital campaigns. Gartner estimates that by 2015 consumer
technology companies will have switched one-third of their traditional
marketing budgets to digital1, and CMOs will outspend CIOs on
information technology by 20172.
The combination of ExactTarget and salesforce.com will increase the
value proposition that customers of both companies will receive.
Salesforce.com customers—including many of the world’s largest and
fastest growing organizations—will be able to extend their investments
in sales, service and social marketing with access to the industry’s
most comprehensive marketing automation solution. ExactTarget’s large
and vibrant customer base—including many of the world’s largest consumer
brands—will have access to new world-class social marketing
capabilities, and will be able to leverage salesforce.com’s leading
sales, service and platform solutions to transform their end-to-end
Comments on the News
“The CMO is expected to spend more on technology than the CIO by
2017,” said Marc Benioff, chairman and CEO, salesforce.com. “The
addition of ExactTarget makes Salesforce the starting place for every
company and puts salesforce.com in the pole position to capture this
“ExactTarget’s mission is to revolutionize how businesses connect with
their consumers using data-driven digital marketing across all
channels,” said Scott Dorsey, ExactTarget chairman, chief executive
officer and co-founder. “Salesforce.com’s tremendous strength in
social marketing, along with its leadership position in sales and
service, not only will accelerate this vision, but also provide our
customers with a powerful, integrated CRM platform to transform their
end-to-end customer experience.”
“Marketing was the fastest growing CRM category in 2012, growing at
21% (more than four times the software industry forecast norm in
2012),” said Yvonne Genovese, managing VP, Gartner’s Marketing Leaders
Research. “We believe this growth will continue and marketing will be
the largest growing CRM category through 2017.”
Salesforce Marketing Cloud—The Marketing Platform of Choice for CMOs
The acquisition of ExactTarget will accelerate the growth and leadership
of the Salesforce Marketing Cloud. The combination of ExactTarget’s
industry-leading marketing automation and campaign management
capabilities with salesforce.com’s leading social marketing
solutions—listening with Radian6, publishing with Buddy Media, and
advertising with Social.com—will deliver the marketing platform of
choice for CMOs. Now any company will be able to connect with their
customers in entirely new ways across email, social, mobile and the web.
Acquisition to Create the Market and Technology Leader in Marketing
As the global leader in CRM, salesforce.com is number one in sales,
service and cloud platforms. And now with the combination of Salesforce
and ExactTarget, salesforce.com will become the leader in marketing. The
acquisition gives salesforce.com industry leading solutions across every
major pillar of CRM, creating a unique customer platform that enables
companies to transform how they connect to their customers throughout
every part of the customer lifecycle. For ExactTarget, joining
salesforce.com will accelerate its growth by providing dramatically
increased customer and geographic reach and global operational scale.
ExactTarget—Leading Cloud Marketing Platform for More Than 6,000
Founded in 2000, ExactTarget is a leading cloud marketing platform. The
company’s solutions enable marketers to integrate customer data from any
source to power digital marketing campaigns across multiple channels,
all while leveraging sophisticated marketing automation capabilities.
More than 6,000 companies around the world, including Coca-Cola, Gap and
Nike rely on ExactTarget’s solutions to drive customer engagement,
increase sales and improve return on marketing investments.
Details Regarding the Proposed ExactTarget Acquisition
Under the terms of the transaction, salesforce.com will commence a
tender offer to acquire all of the outstanding shares of ExactTarget for
$33.75 per share in cash, subject to customary closing conditions,
including the receipt of a majority of ExactTarget 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, ExactTarget shares not tendered in the
tender offer will be converted in a second step merger into the right to
receive the same $33.75 per share in cash paid in the tender offer.
The transaction is expected to close late in salesforce.com’s fiscal
second quarter, ending July 31, 2013.
Financial Impact of the Proposed ExactTarget Acquisition
FY14 Revenue: The acquisition is expected to increase total
revenue by $120 to $125 million. This estimate reflects an approximately
$65 to $70 million reduction relating to fair value adjustments to
billed deferred revenue and unbilled backlog, adjustments related to the
combined customer base, and inter-company revenue elimination.
FY14 non-GAAP EPS: The acquisition is expected to reduce non-GAAP
EPS by approximately $0.16. This estimate reflects reduced revenue
expectations as described above, and standard integration costs and
transaction fees expected to be in the range of $40 to $45 million.
Q2 FY14 non-GAAP EPS: The acquisition is expected to reduce
fiscal second quarter non-GAAP EPS by approximately $0.05. This estimate
reflects reduced revenue expectations as described above, the company’s
operating results for the fiscal second quarter and standard integration
Based on the above, Salesforce.com is updating its guidance previously
reported on May 23, 2013 as follows:
Q2 FY14 Guidance: Based on an expected late fiscal second quarter
close date, this transaction is not expected to have any material impact
to salesforce.com’s fiscal second quarter FY14 revenue results
previously guided on May 23, 2013. Non-GAAP EPS is expected to be in the
range of $0.06 to $0.07.
Full Year FY14 Guidance: Revenue for the company’s full fiscal
year 2014 is projected to be in the range of $3.955 to $4.0 billion, an
increase of 30% to 31% year-over-year.
Diluted non-GAAP EPS is expected to be in the range of $0.31 to $0.33.
Non-GAAP EPS estimates assume a non-GAAP tax rate of approximately 36%.
The non-GAAP EPS calculation assumes an average fully diluted share
count of approximately 645 million shares.
These estimates assume a late fiscal second quarter close date, and
actual results could differ materially based on the final transaction
close date. The company will update full year GAAP EPS guidance upon
completion of purchase accounting after the transaction closes.
Non-GAAP Financial Measures: This press release includes
information about non-GAAP EPS, non-GAAP tax rates, and constant
currency growth rates (collectively the "non-GAAP financial measures").
Non-GAAP EPS estimates exclude the impact of the following non-cash
items: stock-based compensation, amortization of acquisition-related
intangibles, and the net amortization of debt discount on the company's
convertible senior notes, as well as income tax adjustments. The purpose
of the non-GAAP tax rate is to quantify the excluded tax adjustments and
the tax consequences associated with the above excluded non-cash expense
items. These non-GAAP financial measures are not measurements of
financial performance prepared in accordance with U.S. generally
accepted accounting principles. The method used to produce non-GAAP
financial measures is not computed according to GAAP and may differ from
the methods used by other companies. Non-GAAP financial measures are not
meant to be considered in isolation or as a substitute for comparable
GAAP measures and should be read only in conjunction with the company's
consolidated financial statements prepared in accordance with GAAP.
BofA Merrill Lynch is serving as the financial advisor to salesforce.com.
JP Morgan is serving as the financial advisor to ExactTarget.
Management Conference Call
Salesforce.com and ExactTarget will host a conference call to discuss
this transaction at 8:00 a.m. (ET) / 5:00 a.m. (PT) on June 4, 2013. A
live dial-in is available domestically at 866-901-7332 and
internationally at +1-706-902-1764, passcode salesforce.com or 89103168.
A live audiocast of the event will be available on the salesforce.com
Investor Relations website at http://www.salesforce.com/investor
and ExactTarget’s website at http://www.ExactTarget.com/company/investor-relations/events-presentations.
A replay will be available at 800-585-8367 or +1-855-859-2056 passcode
89103168, until midnight (ET) July 4, 2013.
ExactTarget is a leading global provider of cross-channel digital
marketing software-as-a-service solutions that empower organizations of
all sizes to communicate with their customers through email, mobile,
social media, web and marketing automation. ExactTarget’s suite of
integrated applications enables marketers to plan, automate, deliver and
optimize data-driven digital marketing and real-time communications to
drive customer engagement, increase sales and improve return on
marketing investment. Headquartered in Indianapolis, Indiana with
offices in Asia, Australia, Europe, North America and South America,
ExactTarget trades on the New York Stock Exchange under the ticker
symbol “ET.” For more information, visit www.ExactTarget.com.
Salesforce is the world’s largest provider of customer relationship
management (CRM) software. For more information about Salesforce.com
(NYSE: CRM), visit: www.salesforce.com.
Any unreleased services or features referenced in this or other press
releases or public statements are not currently available and may not be
delivered on time or at all. Customers who purchase salesforce.com
applications should make their purchase decisions based upon features
that are currently available. Salesforce.com
has headquarters in San Francisco, with offices in Europe and Asia, and
trades on the New York Stock Exchange under the ticker symbol “CRM.” For
more information please visit http://salesforce.com,
or call 1-800-NO-SOFTWARE.
This document contains forward-looking statements with respect to the
tender offer and related transactions and the effect on operating
margins, cash flows and growth, expectations with respect to synergies
and cost savings, the closing of the tender offer and related
transactions and the impact on revenues and earnings per share, the
combined capabilities of the companies’ products, the impact of
Salesforce Marketing Cloud, the expected relative spending by CMOs and
CIOs in the future, expectations regarding market opportunities, size
and growth, market and industry trends and general business outlook.
When used in this press release, the words "can," "will," "intends,"
"expects," "is expected," similar expressions and any other statements
that are not historical facts are intended to identify those assertions
as forward-looking statements. Such statements are based on a number of
assumptions that could ultimately prove inaccurate, and are subject to a
number of risk factors, including the inability to achieve anticipated
synergies, cost reductions or operating efficiencies without unduly
disrupting business operations, unexpected costs associated with, or
inability to complete, integration activities in a timely manner, the
possibility that key personnel of ExactTarget may not be retained by
salesforce.com, responses from competitors, customers, users and
partners, uncertainties regarding the timing of the closing of the
transaction, uncertainties as to how many of ExactTarget’s stockholders
may tender their stock in the tender offer, the possibility that a
governmental entity may prohibit, delay or refuse to grant approval for
the consummation of the transaction, and general economic and business
conditions. Salesforce.com does not assume any obligation to update any
forward looking statement, whether as a result of new information,
future events or otherwise. Factors that could cause actual results of
the tender offer to differ materially include the following: costs
related to the proposed transaction, the risk of failing to obtain any
regulatory approvals or satisfy conditions to the transaction, the risk
that the transaction will not close or that closing will be delayed, the
risk that salesforce.com’s and ExactTarget’s respective businesses will
suffer due to uncertainty related to the transaction, the competitive
environment in our industry and competitive responses to the transaction
as well as risk factors set forth above. Further information on factors
which could affect the company’s financial results is provided in
documents filed by salesforce.com with the U.S. Securities and Exchange
The tender offer has not yet commenced. This press release is for
informational purposes only and is neither an offer to purchase nor a
solicitation of an offer to sell any securities. At the time the tender
offer is commenced, salesforce.com will file with the Securities and
Exchange Commission (“SEC”) a Tender Offer Statement on Schedule TO and
ExactTarget will file a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the tender offer. ExactTarget
stockholders and other investors are strongly advised to read the tender
offer materials (including the Offer to Purchase, the related Letter of
Transmittal and certain other tender offer documents that have yet to be
filed) and the Solicitation/Recommendation Statement because they will
contain important information, which should be read carefully before any
decision is made with respect to the tender offer. The Tender Offer
Statement and the Solicitation/Recommendation Statement will be
available for free at the SEC’s website at www.sec.gov.
Free copies of these materials and other tender offer documents will be
made available by the information agent for the tender offer.
In addition to the Offer to Purchase, the related Letter of
Transmittal and certain other tender documents, salesforce.com and
ExactTarget file annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any reports,
statements or other information filed by the parties at the SEC public
reference room at 100 F Street, N.E., Washington, D.C. 20549. Please
call the Commission at 1-800-SEC-0330 for further information on the
public reference room. The parties’ filings with the SEC are also
available to the public from commercial document-retrieval services and
at the website maintained by the SEC at www.sec.gov.
© 2013 salesforce.com, inc. All rights reserved. Salesforce, Sales
Cloud, Service Cloud, Marketing Cloud, AppExchange, Salesforce Platform,
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herein may be trademarks of their respective owners.
1 Gartner, Inc. “Predicts 2013: Digital Marketing Imperatives
for Consumer Technology Providers”, December 2012
2 Gartner, Inc. “High-Tech Tuesday Webinar: Software Market
Dynamics in EMEA in 2013 and Beyond”, October 2012
Salesforce.com Media Contact:
Mitch Frazier, 317.275.5034