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On Tuesday, Salesforce.com (NYSE:CRM) maintained its Outperform rating according to William Blair analysts, following the announcement of a definitive agreement to acquire Informatica, a data management software provider. The deal, announced before the market opened on May 27, values Informatica at $8 billion in equity value, net of Salesforce’s current investment in the company. Informatica, which boasts impressive gross profit margins of 80.5% and maintains a "GOOD" financial health rating according to InvestingPro, has demonstrated strong operational efficiency.
Salesforce revealed that Informatica shareholders are set to receive $25 per share, a 33% premium over the stock’s price prior to acquisition rumors that emerged late last week. The acquisition will be an all-cash transaction, funded through a mix of Salesforce’s existing cash reserves, which stood at $14 billion at the end of the last quarter, and new debt, with Salesforce currently holding $8.4 billion in debt. Notably, Informatica operates with a moderate level of debt and maintains strong liquidity, with current assets exceeding short-term obligations by nearly 2x. Want deeper insights? InvestingPro offers comprehensive financial analysis and valuation metrics for over 1,400 US stocks.
The agreed price per share suggests an estimated enterprise value for Informatica of $9.8 billion. This valuation implies a deal multiple of 5.7 times next twelve months (NTM) revenue and 17 times NTM EBITDA, according to the analysis provided. The acquisition is expected to be finalized in early fiscal 2027.
Informatica’s shareholders, who collectively hold 63% of the company’s voting power, have already expressed their approval of the transaction through a written consent. This swift move towards consent indicates a strong shareholder agreement with the terms of the acquisition.
The transaction between Salesforce and Informatica marks a significant expansion for Salesforce in the data management domain, as the company continues to broaden its software offerings. According to InvestingPro, Informatica has achieved a perfect Piotroski Score of 9, indicating strong financial performance across multiple metrics. This is just one of many valuable insights available in InvestingPro’s detailed research reports, which transform complex financial data into actionable intelligence.
In other recent news, Salesforce has announced its acquisition of Informatica for approximately $8 billion, with the transaction set to close at the beginning of Salesforce’s fiscal year 2027. Informatica shareholders will receive around $25 per share, and the acquisition has already been approved by shareholders holding 63% of Informatica’s voting power. Guggenheim has maintained a Buy rating on Informatica with a $27 price target, while RBC Capital Markets raised its price target for Informatica to $22, citing its appeal in the data management sector. Meanwhile, Raymond (NSE:RYMD) James reaffirmed a Strong Buy rating for Salesforce, highlighting the strategic and financial benefits of the acquisition, including enhanced data management capabilities and potential synergies. Wedbush Securities also maintained an Outperform rating for Salesforce, emphasizing the strategic move to bolster AI capabilities through this acquisition. Despite these positive projections, Guggenheim has noted potential challenges for Salesforce in integrating Informatica into its operations, given past difficulties with mergers. Informatica, on its part, has introduced a new AI-driven data management strategy, including the launch of AI Agent Engineering and CLAIRE Agents, aimed at enhancing its platform capabilities. The company has also expanded partnerships with major tech firms such as AWS, Microsoft (NASDAQ:MSFT), and Oracle (NYSE:ORCL) to further develop its AI and data management solutions.
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