DEFM14C: Informatica to Merge with Salesforce in $25.00 Per Share All-Cash Deal

Informatica Inc. has entered into a definitive agreement to be acquired by Salesforce, Inc. for $25.00 per share in cash, with the transaction unanimously approved by Informatica's Board of Directors and secured by written consent from key stockholders.

Summary

• Informatica Inc. will merge with Phoenix I Merger Sub, Inc., a wholly owned subsidiary of Salesforce, Inc., with Informatica surviving as a wholly owned subsidiary of Salesforce.
• Each share of Informatica Class A Common Stock and Class B-1 Common Stock will be converted into the right to receive $25.00 in cash, without interest.
• Each share of Informatica Class B-2 Common Stock will be converted into the right to receive $0.00 in cash, without interest.
• Informatica's Board of Directors unanimously determined the merger to be advisable and in the best interests of the company and its stockholders.
• The required stockholder approval was obtained on May 26, 2025, through written consents from Lead Investors (EvomLux S. r.l., Ithaca L.P., and Canada Pension Plan Investment Board), representing approximately 63% of the aggregate voting power.
• The merger is expected to be completed early in Salesforce's fiscal year 2027, subject to regulatory approvals and other closing conditions.
• Salesforce anticipates financing the merger through a combination of available cash on hand and $6 billion in third-party debt financing, consisting of $4 billion in 364-day term loans and $2 billion in three-year term loans.
• Holders of Class A Common Stock (excluding Lead Investors) have appraisal rights under Delaware law, with a demand deadline of August 3, 2025.

Sentiment

Score: 8

Explanation: The sentiment is highly positive for Informatica's Class A and B-1 stockholders due to the significant cash premium and certainty of value provided by the acquisition. The unanimous board approval and fairness opinion from Goldman Sachs reinforce this positive outlook for shareholders. The fixed price means no future upside for current shareholders, but it de-risks their investment.

Positives

• The Class A and Class B-1 Merger Consideration of $25.00 per share represents a premium of approximately 31% to Informatica's 30-calendar-day volume-weighted average closing price and approximately 38% to the 90-calendar-day volume-weighted average closing price, each as of May 22, 2025 (the last trading day prior to media reports).
• The all-cash consideration provides immediate liquidity and certainty of value to Informatica's Class A and Class B-1 stockholders.
• The Informatica Board unanimously approved the merger, deeming it fair and in the best interests of the company and its stockholders.
• The transaction has a high likelihood of completion due to the support of Lead Investors (63% voting power), limited closing conditions, absence of a financing contingency for Salesforce, and Salesforce's strong track record in acquisitions.
• Salesforce will pay Informatica a regulatory termination fee of $363 million if the merger fails due to certain regulatory issues, providing a financial safeguard for Informatica.
• Goldman Sachs & Co. LLC rendered an oral opinion (subsequently confirmed in writing) that the $25.00 cash per share is fair from a financial point of view to Class A and Class B-1 stockholders (excluding Salesforce and its affiliates).

Negatives

• Informatica's Class B-2 Common Stock will be converted into the right to receive $0.00 per share in cash.
• The merger agreement includes restrictions on Informatica's business operations until closing, requiring conduct in the ordinary course and limiting certain actions.
• Informatica's ability to solicit competing acquisition proposals was limited to a 'window shop' period ending 4:00 p.m. Pacific Time on May 27, 2025, which has already passed without alternative proposals.
• The transaction may divert management's attention and resources, and its announcement could impact employee retention and customer/supplier relationships.
• Informatica's stock price may decline significantly if the merger is not consummated.
• The exchange of Class A Common Stock for cash will be a taxable transaction for U.S. federal income tax purposes for U.S. Holders.

Risks

• The merger might not be completed on a timely basis or at all due to failure to receive required regulatory approvals or satisfy other closing conditions.
• The merger agreement may be terminated in circumstances requiring Informatica to pay a termination fee of $253 million.
• The effect of the announcement and pendency of the merger on Informatica's ability to retain and hire key personnel and maintain relationships with customers, suppliers, and partners.
• The risk that the merger disrupts Informatica's current plans and operations or diverts management's attention from its ongoing business.
• Potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger.
• Unpredictability and severity of catastrophic events, including acts of terrorism or outbreak of war or hostilities, could affect Informatica's financial performance.
• Potential lawsuits may be filed in connection with the merger agreement and the transactions contemplated by it.

Future Outlook

The merger is expected to close early in Salesforce's fiscal year 2027, subject to the satisfaction of customary closing conditions, including regulatory approvals. Informatica will cease to be a publicly traded company and will no longer file periodic reports with the SEC. Salesforce's obligation to complete the merger is not conditioned upon the receipt of any financing.

Management Comments

• Informatica's Board of Directors unanimously determined that the Merger Agreement and the transactions contemplated by it, including the Merger, are advisable and fair to, and in the best interests of, Informatica and its stockholders.
• Amit Walia, Informatica's Chief Executive Officer, expressed gratitude for continued support and interest in Informatica.

Industry Context

This acquisition combines Informatica, a leader in AI-powered enterprise cloud data management, with Salesforce, a global leader in customer relationship management (CRM) technology. The merger is expected to enhance Salesforce's Customer 360 platform by integrating Informatica's end-to-end data management capabilities, potentially strengthening Salesforce's position in the evolving cloud and AI-driven data landscape. The transaction follows a period of strategic review by Informatica, including outreach to multiple potential acquirers and prior discussions with Salesforce, reflecting ongoing consolidation and strategic alignment trends within the software and data management industries.

Comparison to Industry Standards

• Goldman Sachs's financial analysis included a 'Selected Precedent Transactions Analysis' in the software industry since 2010, comparing the implied enterprise value of target companies as a multiple of next twelve-month (NTM) revenue.
• The analysis indicated a 25th percentile EV/NTM Revenue multiple of 3.5x and a 75th percentile EV/NTM Revenue multiple of 5.5x for selected transactions.
• Specific comparable transactions and their EV/NTM Revenue multiples included: SolarWinds (5.4x, Feb-2025), Zuora (3.2x, Oct-2024), HashiCorp (9.9x, Apr-2024), Model N (4.8x, Apr-2024), Everbridge (3.9x, Feb-2024), Alteryx (4.3x, Dec-2023), Splunk (7.1x, Sep-2023), VMware (5.0x, May-2022), Nuance (13.9x, Apr-2021), and Informatica's own take-private in 2015 (4.4x).

Management Changes

Corporate Governance

Legal Proceedings

• The document notes the risk of potential lawsuits that may be filed in connection with the Merger Agreement and the transactions contemplated by it.
• Informatica has agreed to provide Parent prompt notice of any litigation brought by stockholders relating to the merger and allow Parent to participate in defense or settlement.

Related Party Transactions

• The Lead Investors (EvomLux S. r.l., Ithaca L.P., and Canada Pension Plan Investment Board), who collectively hold approximately 63% of Informatica's voting power, provided written consent for the merger.
• Canada Pension Plan Investment Board (CPPIB) has an ownership stake in Salesforce, which was disclosed and considered by the Informatica Board, noting it was not individually material relative to CPPIB's total portfolio or investment in Informatica, and was made in the ordinary course of investment activities.
• Certain executive officers of Informatica (Global Head of Engineering, Chief Customer Officer, Chief Product Officer) negotiated post-closing employment arrangements with Salesforce concurrently with the merger agreement execution, which were approved by the Informatica Board.

Stakeholder Impact

• **Shareholders (Class A & B-1)**: Will receive $25.00 per share in cash, providing immediate liquidity and a significant premium over recent trading prices. Appraisal rights are available for eligible Class A shareholders.
• **Shareholders (Class B-2)**: Will receive $0.00 per share in cash.
• **Employees**: Continuing employees will receive comparable target earnings and employee benefits for 12 months post-merger. Years of service with Informatica will be recognized for new plans, and certain equity awards will be assumed by Salesforce or cashed out. The ESPP will be terminated.
• **Directors and Executive Officers**: Have interests in the merger beyond general stockholders, including accelerated vesting of equity awards and severance benefits upon qualifying termination. Indemnification and D&O insurance will be maintained for six years post-merger.
• **Customers & Suppliers**: The announcement and pendency of the merger could potentially impact existing business relationships, though the company is required to use reasonable best efforts to preserve them.
• **Creditors**: Informatica's existing indebtedness under the Company Credit Agreement will be repaid in full at or prior to the Effective Time.

Next Steps

• The merger will not occur until at least 20 days after the mailing of this information statement (July 14, 2025), as required by federal securities laws.
• Salesforce and Informatica will continue to work towards satisfying remaining closing conditions, including obtaining required government regulatory approvals (e.g., HSR Act expiration on July 24, 2025).
• Informatica will terminate its 401(k) plan(s) if requested by Salesforce, effective immediately prior to the Effective Time.
• Salesforce will file a registration statement on Form S-8 for shares of Salesforce common stock issuable with respect to assumed equity awards (adjusted options and RSUs).
• If the merger is completed, Informatica's Class A Common Stock will be delisted from the NYSE and deregistered under the Exchange Act.

Key Dates

Keywords

Merger, Acquisition, Salesforce, Informatica, Cash Consideration, SEC Filing, DEFM14C, Stockholder Approval, Regulatory Approval, Appraisal Rights, Cloud Data Management, CRM, AI-powered, Enterprise Software, INFA, CRM