Salesforce To Buy Demandware In $2.8 Bln Deal - Quick Facts

(RTTNews) - salesforce.com Inc. (CRM) said that it agreed to acquire Demandware (DWRE), a provider of enterprise cloud commerce solutions, in a transaction worth approximately $2.8 billion, net of cash acquired.

As per the terms of the agreement, Salesforce will commence a tender offer for all outstanding shares of Demandware for $75.00 per share, in cash. The transaction is expected to close in the second quarter of Salesforce's fiscal year 2017, ending July 31, 2016.

The transaction is expected to close in the second quarter of Salesforce's fiscal year 2017, ending July 31, 2016, subject to the satisfaction of customary closing conditions, including the acceptance of a majority of Demandware shares in the tender offer and expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Following the successful completion of the tender offer, Demandware shares not tendered in the tender offer will be converted in a second step merger into the right to receive the same $75.00 per share in cash paid in the tender offer.

The acquisition is expected to increase Salesforce's fiscal year 2017 total revenue by approximately $100 million to $120 million. This estimate reflects an approximately $50 million reduction relating to fair value adjustments to deferred revenue and unbilled deferred revenue, adjustments related to the combined customer base, and inter-company revenue elimination.

The acquisition is expected to decrease fiscal year 2017 non-GAAP EPS by approximately $0.07. This estimate reflects standard integration costs and transaction fees expected to be in the range of $30 million.

The acquisition is expected to increase Salesforce's the second-quarter of fiscal year 2017 total revenue by approximately $0 million to $10 million.

Transaction fees related to the acquisition are expected to reduce the second-quarter of fiscal year 2017 non-GAAP EPS by approximately $0.03.

Revenue for Salesforce's fiscal second quarter 2017 is projected to be in the range of $2.005 billion to $2.025 billion, an increase of 23% to 24% year-over-year.

Nnon-GAAP earnings per share for the second-quarter is expected to be in the range of $0.21 to $0.22.

Analysts polled by Thomson Reuters expect the company to report earnings of $0.25 per share and revenues of $2.01 billion for the second-quarter. Analysts' estimates typically exclude special items.

Revenue for Salesforce's full fiscal year 2017 is projected to be in the range of $8.26 billion to $8.32 billion, an increase of 24% to 25% year-over-year.

Non-GAAP EPS for fiscal year 2017 is expected to be in the range of $0.93 to $0.95. Non-GAAP EPS estimates assume a non-GAAP tax rate of approximately 35%. The non-GAAP EPS calculation assumes an average fully diluted share count of approximately 700 million shares.

Wall Street currently is looking for fiscal year 2017 earnings of $1.02 per share on annual revenues of $8.20 billion.