Salesforce fosters its software by acquiring Demandware for $2.8 billion

demandware office

Salesforce.com Inc. has acquired Demandware Inc. for $2.8 billion as the cloud-computing software is aiming to add e-commerce to its portfolio of online sales and marketing services by which it can become a one-stop shop for companies that want to sell things online . Demandware which was founded in 2004 makes a cloud-based platform that businesses use to process e-commerce transactions. This deal which is the largest acquisition of Salesforce till date will help its customers use Demandware’s platform which would be renamed as, the Salesforce Commerce Cloud.

This deal will acts as a threshold for new faction of customers of Demandware which include Design Within Reach, Lands’ End, L’Oreal and Marks & Spencer, to up sell for the other services that it already offered. Salesforce now has more absolute software for businesses operating in the digital space which is on the lines of its competitors Shopify, Amazon, eBay and its former service Magento.

Salesforce is supposed to pay $75 per share in cash for all outstanding shares of Demandware, which is a premium of more than 56% as per the closing price of $47.99 on Tuesday. The transaction is expected to close in the second quarter of the company ending on July 31.

According to Keith Block, Salesforce’s vice chairman, president and chief operating officer, E-commerce is rapidly growing and in next to no time it will be 8 billion dollars industry. He further added that buying Demandware will cater the needs of futuristic commerce industry and will lead Salesforce to multibillion commerce market. Salesforce.com offers a web-based access to software that helps salespeople to keep track of their customers.

As per Brent Thill, an analyst at UBS Group AG, Salesforce.com has a varied track record in its Mergers and Acquisition, while many of its acquisitions were very successful , its June 2012 purchase of online marketing firm Buddy Media for $689 million in cash didn’t turn up as fruitful as expected. Previously in June 2013 Salesforce had bought ExactTarget Inc. for $2.5 billion which became the keystone for Salesforce’s Marketing Cloud service.

Salesforce expects the deal to escalate its yearly profits by about $100 million to $120 million.

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