Salesforce Buys ExactTarget (ET) for $2.5 Billion, Pays 53% Premium by TechStockProspector


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									Robert DeFrancesco’s
June 4, 2013

Salesforce Buys ExactTarget (ET) for $2.5 Billion,
Pays 53% Premium
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Here are some of the topics covered in the May 2013 issue:

*Cloud software shines in Q1 earnings season
*NetSuite shows why it’s a cloud leader
*ServiceNow expanding its addressable market
*Proofpoint raises guidance on key security wins
*SPS Commerce builds its customer base
*Sourcefire raging in networking security
*Adobe Systems gets traction in the cloud
*A valuation reset for Citrix Systems
*Yahoo focuses on content & mobile
*Fusion-IO diversifies its customer portfolio
*LinkedIn disrupts enterprise recruiting
*New growth drivers at Microsoft
*Apple readies its next product cycle
*Akamai sees growth in cloud infrastructure
*Riverbed Technology tries to find footing
*A new capital allocation strategy at Harmonic
*Deal Report: Marketo IPO overview

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------------------------------------------------------------------------------------------------------------ (CRM, $37.80) this morning announced that it would acquire
ExactTarget (ET, $33.69), a provider of cloud-based interactive marketing
solutions, for $33.75 a share in a $2.5-billion deal, its largest ever. The buyout
premium is 52.7% compared to ExactTarget’s closing price from last night.
This purchase was almost a given after Oracle (ORCL) in December announced the
$871-million acquisition of Eloqua, an ExactTarget competitor and (now former)
key Salesforce partner.

Salesforce had to do something to counter the Oracle move. And we all knew
Salesforce CEO Marc Benioff was not going to achieve his goal of turning the
company’s Marketing Cloud into a $1-billion business organically.

In the January 2013 issue of Tech-Stock Prospector (TSP #131), I wrote: “Given
that Eloqua has been scooped up, ExactTarget now becomes a more likely M&A
candidate for Salesforce or other large enterprise players looking for more cloud
exposure.” At the time, ExactTarget shares were trading around $21.

Now we need to figure out if there will be more deals in this space, and who the next
likely buyout targets might be. I have some ideas. On the Salesforce call this
morning, Benioff said the ExactTarget purchase was a “very competitive process,”
which indicates to me that SAP (SAP) may have been in the bidding mix. Plus, the
big buyout premium suggests multiple interested parties. Perhaps we will see SAP
make the next move in this cloud-buyout game.


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