Published via L: 2013-06-05 17:27:36
Salesforce is trying hard and spending large to diversify from its CRM base. Today it announced plans to buy Exact Target for $2.5 billion on top of about $1.5 billion it spent on companies such as Heroku, Radian6 and Buddy Media.
My Two Cents
Salesforce and Marc Benioff have paid a pretty penny for Exact Target (ET). Is this acquisition worth it? ET's is rightfully out of this world as one of the leaders in marketing automation. Does it deserve a 10X multiplier on gross revenue on $292 mm? Without access to Salesforce's "salesforce," ET was projecting another 30-35% increase to approximately $370 mm in gross revenue. Should be even higher with Salesforce. But no EBITDA (in fact a loss of $20 mm). All of this equals $2.5 Billion of Cash! Why because marketing automation/integration in the cloud is white hot! Because SAP also wanted Exact Target! Oh to be selling with multiple bidders into a white hot market.
