Salesforce.com to Buy Radian6 for $340 Million to Add Web-Tracking Service
Salesforce.com Inc. (CRM), the largest supplier of customer-management software, agreed to buy Radian6 Technologies Inc. for about $340 million in cash and stock to add software that lets companies keep abreast of the social Web.
The price includes $276 million in cash and $50 million in stock, Salesforce said today in a statement. Radian6 tracks what’s being said about companies and their products on websites such as Facebook, Twitter, YouTube, and LinkedIn.
Dell Inc., General Electric Co. (GE) and PepsiCo Inc. use Radian6 to spot sales opportunities on those sites or respond to customer complaints, Salesforce Chief Marketing Officer Kendall Collins said in an interview. Chief Executive Officer Marc Benioff has been releasing new products and making acquisitions to expand use of Salesforce’s own software beyond its stronghold of corporate sales staffs.
In December, Salesforce agreed to buy Heroku Inc. for $212 million to tap the surging market for applications written in the Ruby programming language. Last year, Salesforce began selling Chatter, social-networking software for businesses that’s now used by 80,000 companies.
“Social-media integration is increasingly a key decision criteria in every CRM deal,” said Collins, referring to customer relationship management software.
Salesforce, based in San Francisco, said the acquisition will boost its fiscal 2012 revenue by about $45 million to $50 million and reduce earnings per share, excluding some items, by about 11 cents.
The company also agreed to pay an additional $10 million in stock and $4 million in cash to Radian6’s founders. The purchase should close in May, Collins said. Closely held Radian6, based in Fredericton, New Brunswick, has about 300 employees, he said.
Jason Maynard, an analyst at Wells Fargo Securities in San Francisco, said in a note to clients today that Radian6 tripled its revenue last year and already works in partnership with Salesforce.
“The deal is very complementary, and should enhance all of Salesforce’s product lines,” said Maynard, who has a “market perform” rating on Salesforce, and doesn’t own shares.
Jive Software, which competes with Radian6 and Salesforce, considered buying Radian6 more than a year ago and passed, Jive CEO Tony Zingale said in an interview.
“For the shareholder value it will deliver to their client base, they way overpaid,” Zingale said. “It’s overkill for the typical Salesforce client.”
Collins said Radian6 is a leader in its field and has “breakthrough technology.”
Salesforce rose $7.09, or 5.6 percent, to $134.49 at 4 p.m. in New York Stock Exchange composite trading. The shares have gained 1.9 percent this year.
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