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Salesforce announced on June 1, 2016, that it would acquire digital-commerce provider Demandware for approximately $2.8 billion, net of cash acquired. The offer was $75 per share in cash. The acquisition closed on July 11, 2016, and Demandware became Salesforce Commerce Cloud.
What Salesforce agreed to pay
The June 2016 announcement valued the transaction at approximately $2.8 billion, net of cash acquired. Under the tender offer, Salesforce proposed to pay $75 in cash for each Demandware share. The agreement was signed on May 31 and publicly announced the next day. Salesforce’s June 1 announcement and its SEC Form 8-K provide the announced terms.
Salesforce’s fiscal 2017 annual report later reported an approximately $2.9 billion total purchase price for Demandware. That is a different accounting figure from the announced value net of acquired cash. The cited materials do not provide a full reconciliation, so the two figures should not be treated as interchangeable or as evidence of a specific discrepancy. Salesforce’s fiscal 2017 annual report gives the later purchase-price figure.
Why Salesforce wanted Demandware
Salesforce described the acquisition as a way to extend its Customer Success Platform into digital commerce. Its announcement presented Demandware’s enterprise cloud commerce platform as a complement to Salesforce capabilities including sales, service, marketing, communities, analytics, IoT and its platform services. In practical terms, the strategic fit was adjacency: Salesforce was adding commerce to a platform centered on customer relationships.
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Salesforce said the combined offering would help companies connect with customers across channels. The company named Design Within Reach, Lands’ End, L’Oréal and Marks & Spencer as brands using Demandware for web, mobile, social and in-store commerce. Those examples and the stated strategic rationale come from the joint acquisition announcement; they are not independent measures of the deal’s later results.
From announcement to completed acquisition
| Date | Milestone |
|---|---|
| May 31, 2016 | Salesforce entered the merger agreement with Demandware and its acquisition subsidiary. The proposed tender offer was $75 per share in cash, subject to conditions including tenders representing more than 50% of shares and regulatory steps, as described in the SEC filing. |
| June 1, 2016 | The companies publicly announced the definitive agreement and the approximately $2.8 billion net-of-cash transaction value. Salesforce announcement. |
| June 10, 2016 | Salesforce announced the commencement of its tender offer, according to its transaction announcement. |
| June 17, 2016 | The Federal Trade Commission’s early termination notice records the Salesforce/Demandware matter. FTC notice. |
| June 30, 2016 | Salesforce announced that all required regulatory approvals had been received, according to its transaction announcement. |
| July 11, 2016 | Salesforce announced that the acquisition was complete and identified Demandware as the new Salesforce Commerce Cloud. Completion announcement. |
The June announcement forecast closing in Salesforce’s second fiscal quarter of 2017, which ended July 31, 2016. That was a forecast; the actual completion date was July 11.
What Demandware became
After the acquisition, Salesforce positioned Demandware as Salesforce Commerce Cloud within its Customer Success Platform. The completion announcement confirms the new name and the completed transaction. The announcement’s description establishes Salesforce’s intended product positioning, but by itself does not establish subsequent integration results or realized business benefits.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the deal figures do—and do not—show
- Approximately $2.8 billion: the companies’ announced transaction value in 2016, stated net of cash acquired.
- $75 per share: the announced cash tender-offer price for Demandware shares.
- Approximately $2.9 billion: Salesforce’s fiscal 2017 annual-report figure for total purchase price.
The 2016 announcement also described a “multi-billion dollar digital commerce market,” but the cited passage did not give a numerical market estimate or methodology. It is company positioning, not a substantiated market-size statistic. The deal materials likewise do not establish the acquisition’s performance, realized synergies or post-acquisition outcomes.
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