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Salesforce's Spate of Buyouts Keeps Going With ClickSoftware

Zacks Equity Research

Salesforce CRM is in talks to acquire U.S.-Israeli software developer ClickSoftware Technologies for around $1.5 billion, reports Israeli newspaper Calcalist.

ClickSoftware is a provider of automated mobile workforce management and service optimization solutions.

Founded in 1979, ClickSoftware was last acquired in 2015 by San Francisco-based equity firm Francisco Partners for $438 million. Delisted from Nasdaq, the company went private post completion of the deal.

Notably, acquisition activity has always been one of Salesforce’s key growth strategies. The company is eyeing acquisitions to boost its capabilities and capture newer and larger market shares

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Salesforce’s Latest Array of Acquisitions

Salesforce was on acquisition spree in 2016 when it bought 12 companies. After an extended hiatus on the buyout front in 2017 (just one — Sequence), the company spent a significant amount on the same last year.

Last July, Salesforce purchased Israel-based artificial intelligence marketing platform, Datorama, for $850 million.

Additionally, the transaction of MuleSoft for a consideration of $6.5 billion last March — the company’s biggest ever takeover — is considered a major upside.

Notably, in the last reported quarter, MuleSoft’s revenues surged 35% to $105 million. Salesforce’s Platform and other revenues soared 51% to $742 million. Excluding Mulesoft, the same grew 30%. For fiscal 2019, the company expects approximately $375 million of contribution from MuleSoft.

The company is also witnessing strong returns from its consolidations of CloudCraze (March 2018), which is helping it utilize the growing opportunities in the B2B commerce industry.

Last January, Salesforce acquired Attic Labs to enhance its Quip division back-end capabilities. Notably, the integration of document-collaboration platform Quip in 2016, which has clients like Apple, Amazon and Citibank, is a big boon to the company.

Moreover, last October, the company entered into an agreement to buy interactive email service provider, Rebel, for expanding its Marketing and Commerce Cloud abilities.

Salesforce’s sustained focus on broadening its business base through strategic acquisitions and investments will drive growth over the long run, in our view.

salesforce.com, inc. Revenue (TTM)

salesforce.com, inc. Revenue (TTM) | salesforce.com, inc. Quote

Zacks Rank and Other Stocks to Consider

Currently, Salesforce has a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader Computer and Technology sector are Synopsys, Inc. SNPS, Cloudera, Inc. CLDR and Verint Systems Inc. VRNT, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for both Synopsys and Verint is projected to be 10% while the same for Cloudera stands at 8%.

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