Salesforce Inc. agreed to buy Braze Inc., an artificial intelligence-powered platform for marketers, for almost $5.7 billion in enterprise value.
Salesforce will pay Braze investors $47.50 per share, it said in a statement on Tuesday. That represents a 58% premium over Braze's closing stock price on Monday. The deal is expected to close in Salesforce's fiscal 2028, which begins in early February.
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New York-based Braze gathers customer data in real time and uses AI to generate personalized messaging meant for different media and methods of communication, such as mobile apps, websites, email and text messaging. The company serves around 2,770 customers, including Canva, Equinox, Instacart, Venmo and others, according to the statement.
Salesforce shares fell less than 1% at 10:08 a.m. in New York, paring earlier losses. Braze surged 51%. Its stock had been down 12% this year through Monday's close, and 54% since the firm went public in November 2021.
Salesforce will use Braze's technology to bolster several of its products, particularly those for marketing and customer communication via Agentforce, the company's flagship AI tool.
Braze “extends our marketing reach with real-time personalized mobile engagement for high-volume B2C brands,” said Chief Operating and Financial Officer Robin Washington in a call with analysts on Tuesday. The purchase will bring significant engineering and sales talent to the company, she added.
The deal also cements Salesforce's return as a serial software acquirer. Since the start of last year, the San Francisco-based company also bought Fin for $3.6 billion, Contentful for $1.5 billion, and Informatica for $8 billion. Salesforce had taken a hiatus from big deals after activist investors pushed back on the strategy around the start of 2023.
Debt financing shouldn't be needed for the Braze purchase, Washington said. After the deal closes, Salesforce expects to find efficiencies in the business, she added. Braze's gross margin was about 69% in its most recent fiscal year, compared with Salesforce's roughly 78%.
Salesforce's marketing unit has been struggling, posting several recent quarters of essentially flat or declining growth. Customers are beginning to use a new major update to the offering, which includes agentic AI features and will be bolstered by the Braze acquisition, Salesforce executives said on the call Tuesday.
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“Part of Marketing Cloud's slowing growth was arguably due to Braze's share gains and the deal allows Salesforce to take-out a scrappy competitor that is well liked by its enterprise customer base,” wrote Billy Fitzsimmons, an analyst at Piper Sandler.
Shares of other marketing and sales application software vendors like Klaviyo Inc. and HubSpot Inc. jumped Tuesday morning after the Braze acquisition was announced. These are some of the companies “under the most pressure from AI disruption via OpenAI and Anthropic,” wrote Bloomberg Intelligence analysts Niraj Patel and Maria Beltran.
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