Salesforce Acquires Own Company for $1.9 Billion

Investing.com — Salesforce (NYSE: CRM) announced on Thursday that it will acquire Own Company, a provider of data protection and management solutions, for $1.9 billion in cash. This acquisition aims to bolster the growth of Salesforce’s data security and privacy products.

The deal comes as customers increasingly seek to minimize data loss risks due to system failures, human errors, and cyberattacks.

Salesforce anticipates that the acquisition will begin contributing to free cash flow starting in the second year after closing.

Mizuho analysts remarked, “We believe this is a logical acquisition that should enhance CRM’s data/AI strategy, with free cash flow (FCF) accretion expected in the second year after the deal closes.” They noted that while Salesforce has not commented on the operating margin impact, they do not expect this acquisition to hinder Salesforce’s commitment to operating margin improvements.

Overall, the acquisition indicates that Salesforce is demonstrating a higher level of discipline in its mergers and acquisitions (M&A) strategy.

Separately, analysts from Wolfe Research described the news of Salesforce acquiring Own Company as “about as positive as an M&A headline for CRM could be.”

Wolfe views the acquisition as a strategic initiative that enables Salesforce to tap into the adjacent data protection total addressable market (TAM), currently valued at around $150 billion. They estimate the cloud data segment could represent at least $30 billion of that total.

Additionally, Wolfe believes that this acquisition diminishes the likelihood of Salesforce engaging in a larger, dilutive deal. Given that Own Company operates on the Force.com platform, scaling the business should be seamless due to Salesforce’s existing familiarity with the technology.

Wolfe analysts stated, “Own is highly regarded as one of the best platforms for Salesforce data backup, and with already strong AppExchange traction, we believe CRM’s GTM engine can help quickly scale Own across the existing customer base and further unlock the large cloud data protection and management TAM.”

The acquisition is expected to close in the fourth quarter of fiscal 2025.