Salesforce acquires ExactTarget for $2.5 billion according to a press statement. ExactTarget is an industry leader in marketing automation, while Salesforce is the #1 crm platform.
ExactTarget revenue for Q1 2013 stood at $88.9 million, with a loss of $11.6 million. ExactTarget clients include Coca-Cola, Gap and Nike. The acquisition is expected to close on July 31st.
With the acquisition, Salesforce revenue is expected to grow by $125 million. Adjusted earnings for 2013 are now heading towards $4 billion.
Salesforce acquires ExactTarget: the numbers
With 6000 customers, ExactTarget’s revenue for 2012 was at roughly $49k per customer. Salesforce however is paying roughly $416k per customer: nearly ten times the annual revenue per customer.
Oracle bought Eloqua back in December last year for $871 million. The fact that Salesforce acquires ExactTarget is the second big acquisition in the marketing automation industry recently.
In terms of shares, Salesforce is paying $33.75 per share, in cash. It’s been just 15 months since ExactTarget’s highly anticipated IPO. The company raised $161.5 million back then, selling 8.5 million shares. Revenue for 2012 was $292.3 million, a 41 percent increase compared to 2011. Non-U.S. revenue was $53.1 million, an 84 percent increase compared to 2011.
The number of employees currently working at ExactTarget was at 1,352 in Q3 2012, but has grown to about 2000 in 2013. Before the stock exchanges (NYSE) opened, ExactTarget’s share price was at $22.
Salesforce acquires ExactTarget: consequences for the industry
In the online SaaS crm and (email) marketing automation industry, there aren’t that many big names. There’s Oracle with Eloqua (2012), Vocus that bought iContact (2012), WhatCounts that bought Blue Sky Factory (2011) and IBM which incorporated Unica (2010). The latest news that Salesforce acquires ExactTarget means platforms are getting bigger and more integrated. For some, it could be useful and convenient: maybe even more affordable. For others, things might get a little too complex. While crm is closely tied to marketing automation, they both have their own unique approach and little details that deserve attention.
Silverpop’s CEO Bill Nussey responded to the acquisition in a blog post, stating the following:
Today’s news about Salesforce.com’s acquisition of ExactTarget presents an interesting choice to marketers. Acquiring a set of separate tools does promise a broad range of features from a single vendor, but it may not be the right answer for modern marketers. While creating a cluster of applications may have worked in the past for solutions like ERP and Manufacturing, technology has become much more advanced, and marketers have very different priorities than other departments within the same company.
He continues on the specifics of marketing:
The marketing world is constantly shifting to align with the changing needs of customers and realities of the marketplace. The best marketing is about creating an amazing customer experience and, without a unified platform and a consolidated view of each customer, the experience will become too fragmented, just like the siloed applications driving them.
The part ‘marketers have very different priorities than other departments’ is something that could have an impact on the customer experience because a company should have one clear goal and one clear message and behaviour towards the customer. While I do agree with Bill that putting together different platforms might not always work out well, I disagree with marketers having different priorities. They should be the main communications hub for a company, and make sure everyone speaks the same language and has the same desire to help customers.
I congratulate both companies on the acquisition, and hope that both culture and platforms will be integrated in the best way possible.
Sources:
Salesforce
ExactTarget press release
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