Salesforce Inc (CRM)

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Why Salesforce Would Want to Buy ClickSoftware for $1.5 Billion
By: The Motley Fool | January 21, 2019

Another year, another multibillion-dollar takeover...maybe.

2018 was the biggest year in Salesforce's (NYSE:CRM) history in more ways than one. Revenue continued to rise at a double-digit clip, hitting new highs; co-founder and longtime CEO Marc Benioff appointed a co-CEO, Keith Block, to share the management burden; and the enterprise software company spent over $7 billion on smaller rivals, its biggest calendar year ever for acquisitions.

Salesforce isn't shy about its aspirations in the cloud-based software world. Buying smaller but complementary competitors is an increasingly important part of that strategy. To that end, the company may be about to make another big purchase -- acquiring privately-held Israeli company ClickSoftware for $1.5 billion -- according to a recent Reuters report that Salesforce neither confirmed nor denied.

Salesforce to the field
If the $1.5 billion valuation figure Reuters cited can be believed, ClickSoftware is a fast-growing business. The software provider was taken private in 2015 for just $438 million by technology private equity firm Francisco Partners.

ClickSoftware provides field service management tools. Salesforce already participates in this market through its Field Service Lightning product -- part of the service cloud segment. Nevertheless, ClickSoftware could be a formidable addition to its arsenal. On its website, ClickSoftware boasts that it is able to save its customers 30% in fuel costs, increase jobs per employee by 29%, and increase same-day repair calls by 65%. Plus, if it does go for more than three times the amount it last sold for in 2015, that would indicate the service provider has been on a tear in the last few years.

Where the puzzle piece fits
Assuming Salesforce does move forward with the purchase of ClickSoftware, it would be the company's sixth acquisition since the beginning of 2018. If $1.5 billion is the price tag, it would be well under the hefty $6.5 billion paid for MuleSoft, but would still rank as one of the largest acquisitions in Salesforce's history.

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