Salesforce has shared insight into its acquisition strategy by discussing its mergers and acquisitions (M&A) framework.
The CRM provider cited this framework as a critical reason that no company has been "more successful with M&A than Salesforce."
During an earnings call, Marc Benioff, Chairman and CEO of Salesforce, said: "Products that we acquired, many of them at the multi-hundred-million-dollar revenue level, are now at the multi-billion-dollar revenue level.
Some of the largest, most important software companies in the market today are actually companies that we acquired at much smaller levels.
While Benioff confirmed that Salesforce will continue to invest in "inorganic innovations," he was quick to point out that any deals will be struck in accordance with the company’s M&A framework.
When it comes to large-scale acquisitions, the CRM leader outlined the need for the company it snaps up to have a best-in-class asset, a clear timeline to value accretion, and a strong balance sheet.
In doing so, the CEO pointed to the recent acquisition of Spiff, the compensation management (ICM) software solutions provider, as an example of the type of deal that the organization is focusing on.
Meanwhile, Benioff emphasized that Salesforce is "not going to shy away from M&A for any one particular reason if it's within our framework."
Yet, the CEO confirmed that even those potential acquisitions and mergers that sit within the framework will be treated with "extreme" caution. He noted:
We're also going to be quick to walk away from things that we are not totally confident in or that we don't have the trust with whatever company that we're looking at.
The Salesforce-Informatica Fallout
The timing of these statements is particularly interesting, given the reports on the company’s proposed acquisition of Informatica, which dominated the CX news space earlier in the year.
