Salesforce said on Tuesday that it is making a nearly $6 billion acquisition at a 58% premium, but Wall Street’s response was frosty.
Shares of Salesforce Inc. (CRM) fell 2.8% in afternoon trading Tuesday, after the company announced it would acquire messaging platform Slack Technologies Inc. (WORK) for $27.7 billion in an all-stock deal.
The deal values Slack at $140.26 a share, a 58% premium to Slack’s closing price on Monday.
Read: Slack shares surge 56% after Salesforce deal announcement
Analysts at Wedbush called the deal “expensive” in a research note, and said that Salesforce was “paying a hefty premium” for Slack.
“While Slack is a best-in-breed product, we believe Salesforce is paying a hefty premium for the asset,” the analysts wrote. “We are concerned that the deal could dilute Salesforce’s margins.”
The deal is expected to close in the second quarter of Salesforce’s fiscal year 2022.
Salesforce shares have risen 17.7% over the past year, while Slack shares have fallen 16.2%.