Salesforce to purchase startup Own for $1.9 billion in cash.

• Salesforce stated that purchasing Own would not affect shareholder return initiatives and would be beneficial to free cash flow starting in the second year following the deal's closure.
• Microsoft's Dynamics software, along with Salesforce and ServiceNow, are backed up by Own.

Salesforce announced on Thursday that it plans to pay $1.9 billion in cash for Own Co., a startup that specializes in cloud-based data backup tools. The deal is expected to close in the quarter ending in January 2025, pending regulatory approval.

In a 2021 funding round, the startup, previously called OwnBackup, was valued at $3.35 billion. Salesforce Ventures, the cloud software company's investment arm, participated in that round as well as earlier ones.

Salesforce is set to make a significant deal, marking a return to large-scale acquisitions, just under two years after CEO Marc Benioff announced the board had disbanded the mergers and acquisitions committee.

Salesforce's profitability was questioned by activist investors after they bought stakes in the company and raised concerns about the return on investment from expensive assets such as MuleSoft and Slack.

The decline in value for Own indicates a slower market environment for software companies.

In late 2021, cloud software adoption decreased as investors lost interest, while central banks raised rates to combat inflation. This led single-product companies, including startups and publicly traded companies, to struggle with slimmed-down information-technology budgets.

All of the companies, Anaplan, Avalara, Coupa, Qualtrics, Sumo Logic, and Zendesk, became private.

Own, which had focused on assisting Salesforce clients, aimed to broaden its scope. In its 2021 funding statement, it declared its intention to collaborate with Dynamics, a software competitor to Salesforce's core applications. As a result, support for Dynamics was added.

PredictSpring and Tenyx are the latest startups that Salesforce has announced plans to acquire in recent weeks.

Salesforce stated that the acquisition of Own wouldn't affect its shareholder return initiatives, and the deal would be accretive to free cash flow from the second year after the deal's closure.

In April, Informatica denied being in acquisition talks with Salesforce despite media reports suggesting a potential $10 billion deal.

"Benioff stated on Salesforce's May earnings call that they will continue to evaluate products both organically and inorganically. However, if they consider a large-scale acquisition, they will ensure that it is not detrimental to their customers, is accretive, and has the appropriate metrics."

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