Salesforce shares rebound on Thursday, company to acquire Israeli firm ClickSoftware for $1.35 billion

August 9, 2019 10:27 am

Salesforce.com Inc (CRM) said on Thursday that it had agreed to buy Israeli software development company ClickSoftware in a cash and stock deal valued at $1.35 billion.

The acquisition is expected to accelerate the growth of Salesforce’s Service Cloud platform.

Salesforce shares closed higher for the fifth time in the past sixteen trading sessions in New York on Thursday. It has also been the sharpest daily surge since July 24th. The stock went up 1.54% ($2.18) to $143.82, after touching an intraday high at $144.96, or a price level not seen since August 6th ($144.96).

Shares of Salesforce.com Inc have risen 5.00% so far in 2019 compared with a 17.20% gain for the benchmark index, S&P 500 (SPX).

In 2018, Salesforce’s stock went up 33.98%, thus, it outperformed the S&P 500, which registered a 6.24% loss.

Salesforce’s proposal was net of the value of shares already owned by the company, after taking into account estimated purchase price adjustments.

The deal is to be finalized during Salesforce’s fiscal quarter, which ends on October 31st, subject to various approvals.

The acquisition of ClickSoftware would be Salesforce’s second key deal in Israel since July last year. Back then Salesforce bought cloud-based artificial intelligence marketing platform Datorama for $850 million.

Analyst stock price forecast and recommendation

According to CNN Money, the 38 analysts, offering 12-month forecasts regarding Salesforce.com Inc’s stock price, have a median target of $185.00, with a high estimate of $200.00 and a low estimate of $139.00. The median estimate represents a 28.63% upside compared to the closing price of $143.82 on August 8th.

The same media also reported that at least 36 out of 42 surveyed investment analysts had rated Salesforce.com Inc’s stock as “Buy”, while 3 – as “Hold”.

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