Following Salesforce Deal, Barclays Raises Demandware's Target To $75

Barclays has increased its price target on Demandware Inc DWRE to $75 from $43, following the $75 a share takeover offer from salesforce.com, inc. CRM.

"We think that $75 is likely the final price, as we believe a full process was run, as the price represents a 56 percent premium to the prior day's close. Similarly, we also think the deal is likely to be completed," analyst Raimo Lenschow wrote in a note.

Lenschow, who has an Equal Weight rating on Demandware, said the company "is a solid addition for Salesforce, as it is the premier SaaS e-commerce platform vendor. Salesforce is creating a new cloud called Commerce Cloud with Demandware at the core."

Related Link: Next Generation Ad Tech Performance Debuts In Adobe Marketing Cloud

"Commerce Cloud will allow CRM to attack the e-commerce market, which is a nice adjacency to the company's other clouds. Commerce Cloud represents an exciting cross-sell opportunity for customers already implementing Sales Cloud and Marketing Cloud," the analyst highlighted.

Meanwhile, Lenschow noted that Adobe Systems Incorporated ADBE could have been another interested party, given Demandware's adjacency to the company's marketing business and the technical integration between Demandware and Adobe's content manager offering. But, the analyst believes there is no risk in the completion of the deal.

At the time of writing, shares of Demandware were trading at $74.68.