IMAGE SOURCE: Demandware Inc.
Continue Reading Below
What:Shares of Demandware Inc. (NYSE: DWRE) popped 55% Wednesday after the enterprise cloud-commerce solutions company agreed to be acquired by CRM leaderSalesforce.com (NYSE: CRM).
So what: More specifically, Salesforce has signed a definitive agreement to purchase Demandware through a tender offer for all outstanding shares at $75 per share in cash. That's a 56% premium to yesterday's closing price, and values Demandware at roughly $2.8 billion net of cash acquired.
Salesforce CEO Marc Benioff stated: "Demandwareis 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."
The companies' combined press release also revealed the acquisition will allow Salesforce to extend its CRM platform to include what will be dubbed the new Salesforce Commerce Cloud, positioning it to capture a new multi-billion market. Meanwhile, Demandware's customers will be able to take advantage of Salesforce's industry-leading sales, service, marketing, communities, and analytics solutions.
Now what:The deal is expected to close some time in Saleforce's fiscal second-quarter 2017, which ends July 31, 2016, and is still subject to customary closing conditions including the acceptance of a majority of Demandware shares in the tender offer. But as it stands, it's hard to argue with such a healthy acquisition premium for Demandware shares. With the exception of shareholders who have held Demandware stock for close to a year (and for whom waiting to sell would result in more-favorable long-term capital gains taxes), investors would be wise to take today's profits and put them to work elsewhere.
The article Why Demandware Inc. Stock Skyrocketed 55% Today originally appeared on Fool.com.
Steve Symington has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Salesforce.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright 1995 - 2016 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.