Shares of Tableau Software (NYSE:DATA) skyrocketed 35.4% as of 2:30 p.m. EDT Monday after Salesforce.com (NYSE:CRM) agreed to acquire the data-visualization specialist. Meanwhile, shares of two of Tableau's data-analytics industry peers, Alteryx (NYSE:AYX) and Splunk (NASDAQ:SPLK), were each up around 6% on the news. Salesforce, for its part, is down around 5.3%.
More specifically, Salesforce will acquire Tableau in an all-stock transaction -- which helps explain Salesforce's drop today -- in which each share of Tableau will be exchanged for 1.103 shares of Salesforce common stock. Based on Salesforce's three-day average close as of Friday (before today's modest drop), the deal represented an enterprise value for Tableau of roughly $15.7 billion net of cash. The exchange should also be tax free for Tableau shareholders, with the exception of cash paid for any fractional shares held.
In a press release this morning, Tableau argued that combining its platform with Salesforce's Einstein AI assistant will create "the most intelligent and intuitive analytics and visualization platform for every department and every user at any company."
"Salesforce's incredible success has always been based on anticipating the needs of our customers and providing them the solutions they need to grow their businesses," said Salesforce co-CEO Keith Block. "Data is the foundation of every digital transformation, and the addition of Tableau will accelerate our ability to deliver customer success by enabling a truly unified and powerful view across all of a customer's data."
Of course, the acquisition doesn't directly benefit Alteryx or Splunk. But each company will enjoy enviable momentum for its respective data-analytics platform -- with both of them adding hundreds of new enterprise customers in the first quarter of 2019 as more people recognize the previously untapped value they can glean from their data. So it's hardly surprising to see the market driving Alteryx and Splunk higher as investors drool over the prospect of an increase in merger and acquisition activity in the space.
As it stands, the acquisition still needs to pass regulatory muster and requires the majority approval of Tableau shareholders. The investor approval will be easier to achieve considering both the acquisition premium and the fact that Tableau founders Christian Chabot, Patrick Hanrahan, and Christopher Stolte have all indicated they'll tender their own shares in the exchange offer.
Assuming all goes as planned, Salesforce expects to close the purchase during its fiscal third quarter ending Oct. 31. With Tableau stock currently trading at only a slight discount to the agreed acquisition price based on Salesforce's current levels -- and unless Tableau investors would rather eventually become Salesforce shareholders -- I think they would do well to consider taking today's profits and putting them to work elsewhere.