Salesforce to Buy Buddy for $745 Million in Social Push
Salesforce.com Inc. (CRM) agreed to buy Buddy Media Inc. for about $745 million, its biggest purchase ever, adding marketing software to promote products on social sites including Facebook Inc. and Twitter Inc.
Salesforce will acquire closely held Buddy for $467 million in cash, $184 million in common stock and $38 million in options and restricted stock, the San Francisco-based company said in a statement today, without specifying a total deal value. The final deal value of about $745 million will also include costs for employee retention, Salesforce said in a regulatory filing.
Software makers including Oracle Corp. (ORCL) and SAP AG (SAP) are buying smaller social-media specialists to take advantage of more than 1 billion consumers who exchange views on products and services on online platforms. Oracle considered purchasing Buddy Media before opting to acquire its peer Vitrue, Chief Executive Officer Larry Ellison said last week.
"Social media has caused the biggest transformation in marketing since the Mad Men era, causing chief marketing officers to completely re-think their strategies," said Marcel LeBrun, senior vice president of Salesforce Radian6's social- media analysis platform in the statement. "By bringing together market leaders Radian6 and Buddy Media, we are doubling down on the Salesforce marketing cloud to provide chief marketing officers with the ability to manage the entire social marketing lifecycle."
Following the completion of the deal, Salesforce said it expects fiscal 2013 revenue of $2.99 billion to $3.025 billion. Earnings per share for that year on a non-GAAP accounting basis will be $1.45 to $1.49, it said. The transaction probably won't have "any material impact" on its results for the fiscal second quarter, it said.
The deal is expected to close in the fiscal third quarter ending Oct. 31, Salesforce said.
Salesforce shares rose 0.4 percent to $131.53 at 9:38 a.m. in New York. The stock had climbed 29 percent this year before today.
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