Salesforce to buy Demandware for $2.8bn

San Francisco-based cloud computing company Salesforce has entered into a definitive agreement to acquire Demandware in a deal worth around $2.8bn.

Under the terms of the transaction, Salesforce will begin a tender offer for all outstanding shares of software technology company Demandware for $75 per share in cash.

Salesforce chairman and chief executive officer Marc Benioff said: “Demandware is an amazing company – the global cloud leader in the multi-billion dollar digital commerce market.

“With Demandware, Salesforce will be well positioned to deliver the future of commerce as part of our Customer Success Platform and create yet another billion dollar cloud."

Salesforce said the acquisition would extend its CRM leadership and position it to capture “this multi-billion dollar digital commerce market with what will be the new Salesforce Commerce Cloud”.

The deal is expected to increase Salesforce's full-year 2017 total revenue by around $100m to $120m. Salesforce said this estimate reflects a reduction of approximately $50m relating to fair value adjustments to deferred revenue and unbilled deferred revenue, adjustments related to the combined customer base, and inter-company revenue elimination.

The transaction is expected to lift Salesforce’s second-quarter 2017 total revenue by up to $10m.

Revenue for Salesforce's fiscal second quarter 2017 is projected to be between $2.005bn and $2.025bn, up 23% to 24% year-over-year.

Demandware shares surged 56% in pre-market trade to $74.97 while Salesforce shares were down 2.4% to $81.72.