• Transaction Value: $2.50 billion
• Implied Enterprise Value:  $2.35 billion
• Implied Enterprise Value/LTM Revenue: 7.1x
• Transaction Structure: Cash

 martinwolf Analysis:

• Salesforce.com, Inc. (NYSE:CRM) yesterday signed a definitive agreement to acquire ExactTarget, Inc. (NYSE:ET), a provider of marketing software services, for $2.5 billion in cash.
• The offer per share is $33.75, close to a 53 percent premium over ExactTarget’s closing price on Monday, June 3rd, resulting in an enterprise value of 7.1 times 12 months of revenue.
• At that multiple, this acquisition falls near the middle of the upper range for major SaaS acquisitions in 2012 and 2013, which we noted in our latest report on SaaS leaders as being between 5.7 and 12 times 12 months trailing revenue. The report is based on our proprietary MW IT Index®, which tracks enterprise values of IT companies in various sectors, including SaaS. 
• With this acquisition, Salesforce.com is looking to build on two previous acquisitions in the space. Last year, the company bought Buddy Media, a social media manager, for $689 million. Two years ago, it purchased Radian6, a company that provides a platform for customers to measure their effectiveness on social sites such as Facebook and Twitter.
• This latest acquisition of ExactTarget — the largest ever for Salesforce.com — was not unexpected. In March, Salesforce.com announced that it would raise $1 billion in debt specifically for acquisitions by issuing convertible notes due in 2018.
• Raising debt for acquisitions, and this transaction, reflect that Salesforce.com knows it must take aggressive action to stay competitive with large traditional software companies such as IBM, Oracle and SAP — all of whom have made billion-plus acquisitions to bolster and expand their SaaS portfolios. ExactTarget no doubt would have been an attractive acquisition opportunity for one of these software titans had Salesforce.com not made the move first.
• The purchase also reflects that the SaaS space is maturing and SaaS companies themselves must look to acquisitions to continue their high rates of growth.
• For these reasons, we would expect to see even more M&A activity over the next 12 to 18 months in the SaaS space — a sector that has already been very acquisitive in the past two years.
• To underscore the pace of acquisitions in the SaaS/cloud industry, today IBM announced that it has agreed to buy SoftLayer Technologies, a cloud computing company, for a reported $2 billion.

martinwolf was not the adviser in this transaction.