Morgan Stanley Upgrades Slack, Says Salesforce Deal At 'Full Valuation'

Slack Technologies Inc WORK has inked a definitive agreement to be acquired by customer relationship management behemoth Salesforce, Inc. CRM.

The transaction is likely to receive the required stockholder and regulatory approvals, and another offer is unlikely to emerge, according to Morgan Stanley.

The Slack Technologies Analyst: Keith Weiss upgraded Slack Technologies from Underweight to Equal Weight and raised the price target from $27 to $44.

The Slack Technologies Thesis: The cash-and-stock deal implies the company’s shares are worth $44.47 each, representing an equity value of more than $27 billion and enterprise value of around $26 billion, Weiss said in the upgrade note.

Management expects the deal to close in the quarter ending July 31, 2021.

“Given the premium on a growth adjusted basis, we see this as a full valuation for Slack, and therefore don't expect anyone to go over the top, especially considering the limited potential buyers given a deal this large,” the analyst said. 

Earlier this month, Slack Technologies released strong quarterly results, with revenues, billings and margins ahead of the consensus estimates, he said.

WORK Price Action: Shares of Slack Technologies were trading down 0.59% at $42.78 at last check Wednesday.

Photo courtesy of Slack.