Yesterday, Salesforce announced it would get Tableau for $15.7B. Tableau sells information visualization applications and the team has assembled an unbelievable business. We analyzed the S-1 in 2014. The company has increased since its public offering to create approximately $1.1B in earnings, growing at 29%. Let’s put this acquisition in circumstance.
Secondly, the Salesforce/Tableau purchase is the third largest software acquisition since 2012, second to Microsoft acquiring LinkedIn and IBM purchasing RedHat.
These acquisition multiples are in accord with the two preceding years of acquisitions that are large, implying that the pricing in the M&A market for its first six months of 2019 hasn’t altered materially. The 23.9B acquisitions indicates that 2019 will probably be similarly busy as 2018, that saw $66B of acquisitions.
It’s all good news for startups.
To get a sense of how this price and multiple contrasts in better terms, lets examine multiples versus expansion speed. The 2019 mergers are in red. They comprise Tableau, SendGrid and Hortonworks. Tableau is the middle red dot.
First, it’s the third company intelligence associated purchase in the last month. Google announced the Looker acquisition last week. SiSense acquired Periscope Data. And now Salesforce is merging with Tableau. This wave of consolidation in the BI world suggests this is a key area of rivalry amongst the biggest software companies in the world during the next ten years. Together, these acquirers have spent $18.4B on these three companies.
Third, Salesforce compensated 11.2x trailing (or last 12 months’ revenue) for Tableau, which is the lower middle of their multiples across these trades. I’t comprised only companies who have disclosed their financials in this information set.