Why Braze Stock Skyrocketed Today
Key Points
Braze is paying $5.66 billion, or $47.50 a share for Salesforce.
Braze will complement Salesforce's core products.
The deal is expected to close next year.
Shares of Braze (NASDAQ:BRZE) were soaring Tuesday morning on news that the software-as-a-service stock was being acquired by Salesforce (NYSE:CRM) for $5.66 billion.
Braze stock was up 51.1% as of 10:10 a.m. ET on the news, while Salesforce was down 0.6% after dipping as much as 3% as investors assessed the wisdom of the deal for the cloud software giant.
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What you need to know about the Braze-Salesforce deal
In the all-cash deal, Braze shareholders will receive $47.50 per share. Braze stock was trading around $45.35 this morning, indicating mild skepticism that the deal would go through as negotiated.
Salesforce has been a prolific acquirer of other software platforms, both private and public, and Braze is known for its real-time, personalized marketing messages and AI marketing tools. The deal makes sense within Salesforce's larger conglomerate strategy, in which the company is trying to meet all of its customers' software needs.
The companies expect Braze's platform to complement Salesforce's core offerings, such as Data 360, Customer 360, Agentforce, and SIForce, and Braze will bring 2,770 customers with it, including Canva, Dairy Queen, Equinox, and Instacart.
Klaviyo, a competitor to Braze, rose on the news as investors bet that that company could also be acquired, or that at least its business was undervalued.
What's next for Braze
The deal is expected to close in Salesforce's fiscal 2028, which begins in February. Given Braze's relatively small size and the frequency of such deals, it's unlikely to meet significant regulatory pushback, and shareholders will almost certainly approve the deal. Salesforce did not update its guidance regarding the acquisition.
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Braze and Salesforce. The Motley Fool recommends Instacart. The Motley Fool has a disclosure policy.