Salesforce.com will acquire advertising software firm Buddy Media in a $689 million cash and stock deal. The acquisition will consist of $467 million in cash and $184 million in salesforce.com common stock, and $38 million in vested salesforce.com options and restricted stock units. Buddy Media backers include Peter Thiel, Marc Pincus, Institutional Venture Partners, Bay Partners and GGV Capital.
Salesforce.com Signs Definitive Agreement to Acquire Buddy Media
–Buddy Media, the world’s leading social media marketing platform, enables the world’s top brands and advertisers, including Ford, Hewlett Packard, L’Oreal and Mattel, to connect with more than a billion customers on Facebook, Google, LinkedIn, Twitter, YouTube and more –Combining market leaders Salesforce Radian6 and Buddy Media, the Salesforce Marketing Cloud immediately will become the platform of choice for brands to listen, engage, gain insight, publish, advertise and measure social marketing programs
SAN FRANCISCO, June 4, 2012 — Salesforce.com [NYSE: CRM], the enterprise cloud computing ( http://www.salesforce.com/cloudcomputing/ ) company, today announced that it has entered into a definitive agreement to acquire Buddy Media, the world’s leading social media marketing platform, for approximately $689 million payable in cash and salesforce.com equity. The transaction is expected to be completed during salesforce.com’s fiscal third quarter ending October 31, 2012, and is subject to customary closing conditions.
Comments on the News
“Salesforce.com now has the number one players in social listening and marketing – Radian6 and Buddy Media,” said Marc Benioff, chairman and CEO, salesforce.com. “With CMOs surpassing CIOs in spend on technology within the next five years, our Marketing Cloud leadership will allow us to capitalize on this massive opportunity.”
“Social media has caused the biggest transformation in marketing since the Mad Men era, causing CMOs to completely re-think their strategies,” said Marcel LeBrun, SVP of Salesforce Radian6. “By bringing together market leaders Radian6 and Buddy Media, we are doubling down on the Salesforce Marketing Cloud to provide CMOs with the ability to manage the entire social marketing lifecycle.”
“Buddy Media’s mission is to eliminate the current state of anarchy in social marketing,” said Michael Lazerow, co-founder and CEO, Buddy Media. “With the Salesforce Marketing Cloud, marketers will be able to unify their efforts to better organize their teams, optimize their social programs and deliver real business results.”
Buddy Media – The World’s Leading Social Media Marketing Platform
Founded in 2007, Buddy Media started as an idea to empower chief marketing officers (CMOs) and agencies to organize their teams and optimize their social media marketing programs. The Buddy Media platform allows customers to publish content, place and optimize social advertising and measure the effectiveness of social media marketing programs. As a result, customers can determine which content is driving the most engagement, test different strategies and understand which campaigns are delivering the greatest return on investment. Leveraging Buddy Media’s award-winning social media marketing platform, companies can connect and engage with more than a billion customers across Facebook, Google, LinkedIn, Twitter, YouTube and more.
With 8 of the top 10 advertisers as clients, Buddy Media is the clear leader in social media marketing. The company currently has nearly 1,000 customers, including major global brands like Ford, Hewlett Packard, L’Oreal, Mattel and the world’s largest marketing agency groups such as IPG (Interpublic Group), Omnicom, Publicis and WPP. Buddy Media is the only company to be named a charter Facebook Preferred Marketing Developer, Google Engagement Solutions partner and LinkedIn Certified Developer.
The Salesforce Marketing Cloud – Transforming Marketing for the Social Era
The marketing industry is undergoing the biggest transformation it’s seen in 60 years, and it’s all being driven by the unprecedented growth of social networks. Today’s leading brands are looking to completely transform their traditional marketing strategies for the social era. Industry analysts predict that CMOs will surpass CIOs in spend on technology within the next five years(1) and that social advertising will be the largest growth area of online advertising by 2013(2).
By combining Buddy Media, the world’s leading social media marketing platform, with Salesforce Radian6, the world’s leading social media listening platform, salesforce.com will deliver the first comprehensive Marketing Cloud that will allow customers to listen, engage, gain insight, publish, advertise and measure social marketing programs. With the Salesforce Marketing Cloud, CMOs will be empowered to manage the entire social marketing lifecycle.
Financial Details of Proposed Buddy Media Acquisition
Salesforce.com will acquire Buddy Media for approximately $467 million in cash and $184 million in salesforce.com common stock, and $38 million in vested salesforce.com options and restricted stock units. All of Buddy Media’s vested and unvested options, restricted stock and restricted stock units held by continuing employees will be assumed and converted into options, restricted stock and restricted stock units of salesforce.com. The acquisition has been approved by Buddy Media’s board of directors and stockholders and is expected to close during the third quarter of salesforce.com’s fiscal 2013, ending October 31, 2012, subject to customary closing conditions, including the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
Additional details and information about the terms and conditions of the acquisition will be available in a current report on Form 8-K to be filed by salesforce.com with the Securities and Exchange Commission.
Financial Impact of Proposed Buddy Media Acquisition Q2 FY13: Given an expected fiscal third quarter close date, this transaction is not expected to have any material impact to salesforce.com’s fiscal second quarter FY13 revenue or EPS results, previously guided on May 17, 2012.
Q3 FY13: Salesforce.com expects to provide revenue and EPS guidance for its fiscal third quarter FY13, including the effects of this transaction, when it announces results for its second fiscal quarter, ended July 31, 2012.
FY13: The acquisition is expected to increase revenues by approximately $20 million to $25 million, and to reduce non-GAAP EPS by approximately $0.14 to $0.15 in the second half of the year ending January 31, 2013 depending on the final acquisition date. To reflect the impact of this acquisition, the company is updating the full-year guidance it provided on May 17, 2012. Specifically, the company now expects FY13 revenue in the range of approximately $2.990 billion to $3.025 billion, and FY13 non-GAAP EPS in the range of approximately $1.45 to $1.49.
Non-GAAP EPS excludes the impact of the following non-cash items: stock-based compensation, amortization of purchased intangibles from acquisitions, and the amortization of debt discount on the company’s convertible senior notes, as well as the tax consequences associated with these items. The financial impact of the acquisition on a GAAP basis cannot be estimated until the allocation of the purchase price is completed following the closing of the acquisition. However, salesforce.com currently expects that the dilutive impact of the acquisition to EPS will be significantly greater on a GAAP basis than a non-GAAP basis.
Management Conference Call
Salesforce.com will host a conference call with investors to discuss this transaction at 8:30 a.m. (ET) / 5:30 a.m. (PT) on June 4, 2012. A live dial-in is available domestically at 866-901-SFDC or 866-901-7332 and internationally at +1 706-902-1764, passcode salesforce.com or 87397859. A live audiocast of the event will be available on the salesforce.com Investor Relations website at http://www.salesforce.com/investor . A replay will be available at 800-585-8367 or +1 855-859-2056, passcode 87397859, until midnight (ET) July 4, 2012.
About Buddy Media
Buddy Media is the social enterprise technology of choice for eight of the world’s top ten global advertisers, empowering them to build and maintain relationships with their consumers in a connections-based world.
The Buddy Media social marketing suite helps brands build powerful connections globally with its scalable, secure architecture and data-driven customer insights from initial point of contact through point of purchase. Buddy Media is one of the most award winning social enterprise software companies, winning the prestigious TechCrunch “Crunchie” Award for Best Enterprise application, named to the Advertising Age 2011 “Digital A-list,” and CEO and Founder Mr. Buddy Media was selected as 2011 New York Entrepreneur of the Year® by Ernst and Young.
Buddy Media is the only company to be named a charter Facebook Preferred Marketing Developer, LinkedIn Certified Developer and Google Engagement Solutions partner. For more information, visit http://www.BuddyMedia.com
CODE Advisors acted as the exclusive financial advisor to Buddy Media.
With more than 100,000 customers, salesforce.com is the enterprise cloud computing company that is leading the shift to the social enterprise. Social enterprises leverage social, mobile and open cloud technologies to put customers at the heart of their business. Based on salesforce.com’s real-time, multitenant architecture, the company’s platform and application services allow customers to:
Create employee social networks with Salesforce Chatter, Salesforce Rypple and Salesforce Force.com.
Develop customer social networks with the Salesforce Sales Cloud, Salesforce Data.com, Salesforce Service Cloud, and Salesforce Site.com.
Connect with customers on public social networks with Salesforce Heroku and Salesforce Radian6.
Empower small business to become social enterprises with Salesforce Desk.com and Salesforce Do.com.
Extend a company’s social enterprise with apps from the leading enterprise app marketplace, AppExchange.
Run apps on Database.com, the first social enterprise database.
Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all. Pricing and availability are subject to change. Customers who purchase salesforce.com applications should make their purchase decisions based upon features that are currently available. Salesforce.com has headquarters in San Francisco, with offices in Europe and Asia, and trades on the New York Stock Exchange under the ticker symbol “CRM.” For more information please visit http://www.salesforce.com , or call 1-800-NO-SOFTWARE.
(1) Gartner http://my.gartner.com/portal/server.pt?open=512&objID=202&mode=2&PageID=5553&resId=1871515&ref=Webin
(2) eMarketer Forecast Sept 2011 http://www.emarketer.com/PressRelease.aspx?R=1008629 ]
Cautionary Statement Regarding Forward-Looking Statements
This press release contains certain forward-looking statements about salesforce.com and Buddy Media, including statements that involve risks and uncertainties concerning salesforce.com’s proposed acquisition of Buddy Media, the expected financial impact of the acquisition on salesforce.com’s fiscal second quarter and full fiscal year financial results, the expected closing of the acquisition, the expected relative spending by CMOs and CIOs in the future, expectations regarding market opportunities, size and growth, the combined capabilities of the companies’ products, transformations in marketing, anticipated product information, capabilities, scale and strategy, including the social media marketing market, the benefits of the proposed acquisition, salesforce.com’s social enterprise strategy, market and industry trends, and general business outlook. When used in this press release, the words “can,” “will,” “intends,” “expects,” “is expected,” similar expressions and any other statements that are not historical facts are intended to identify those assertions as forward-looking statements. Any such statement may be influenced by a variety of factors, many of which are beyond the control of salesforce.com or Buddy Media, that could cause actual outcomes and results to be materially different from those projected, described, expressed or implied in this press release due to a number of risks and uncertainties. Potential risks and uncertainties include, among others, the possibility that the transaction will not close or that the closing may be delayed, the anticipated synergies and benefits of the combined companies may not be achieved, the combined companies may experience delays, unexpected costs or be unable to complete integration activities in a timely manner, if at all, the possibility that key personnel of Buddy Media may not be retained by salesforce.com, responses from competitors, customers, users and partners, general economic conditions in the markets in which either company does business, and the possibility that salesforce.com or Buddy Media may be adversely affected by other economic, business, and/or competitive factors. In addition, the purchase price payable under the merger agreement is subject to customary adjustments. The purchase price figures included herein are based on current estimates of these adjustments. The actual purchase price paid in the merger may differ from these figures if the actual adjustments differ from these estimates. Accordingly, no assurances can be given that any of the events or statements anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of salesforce.com or Buddy Media.
In addition, please refer to the documents that salesforce.com files with the Securities and Exchange Commission on Forms 10-K, 10-Q and 8-K. These filings identify and address other important factors that could cause salesforce.com’s financial and operational results to differ materially from those contained in the forward-looking statements set forth in this press release. You are cautioned to not place undue reliance on forward-looking statements, which speak only as of the date of this press release. Neither salesforce.com nor Buddy Media is under any duty to update any of the information in this press release.
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