RBC still expects Salesforce acquisition of Informatica to be viewed negatively

RBC Capital notes that Salesforce (CRM) announced that it entered into a definitive agreement to acquire Informatica (INFA) for $8B. Salesforce plans to fund the deal with a combination of cash and new debt and expects the deal to close in early FY27, subject to standard regulatory approval. Upon closing, Salesforce intends to integrate Informatica’s technology with Agentforce, as well as its Master Data Management services with Salesforce’s Data Cloud solution, the firm notes. RBC continues to believe that investors will likely view the acquisition of Informatica negatively given Informatica’s recent execution issues; Informatica’s current lack of integration with Salesforce assets; a less clear path toward being margin and growth accretive; and investor concerns that Salesforce may be returning to its pattern of large-scale M&A. The firm has an Outperform rating on Salesforce with a price target of $420 on the shares.