Salesforce's (CRM) $25-per-share offer for Informatica (INFA) was selected over rival bids due to its execution certainty and faster closing timeline, RBC Capital Markets said Friday.
The investment bank said Informatica's July 3 proxy filing detailed a competitive process involving six parties.
While another bidder matched Salesforce's price, concerns about regulatory and execution risks led Informatica's board to prefer Salesforce's bid. The agreement includes a $363 million reverse termination fee payable by Salesforce, highlighting its commitment to closing.
RBC noted that Salesforce's strategic rationale is to expand its data cloud and metadata infrastructure with Informatica's ingestion and governance tools helping to address integration bottlenecks.
RBC also flagged investor concerns about a return to large-scale M&A.
"With the pending acquisition of Informatica, we now have concerns that Salesforce has returned to its reliance on large M&A and desire to "own" too much, which may prove to be a distraction from the core," analysts said in the note.
RBC maintained a sector perform rating and $275 price target on Salesforce shares.
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