A move announced by the software-as-a-service giant Salesforce (NYSE: CRM) is sending the stock price of a relatively unknown AI marketing firm surging this morning. Here’s what you need to know.
What’s happened?
On Tuesday morning, Salesforce announced plans to acquire digital marketing firm Braze (Nasdaq: BRZE) for about $5.66 billion. According to the terms of the deal, Salesforce will pay Braze Class A common stockholders $47.50 in cash per share.
Braze’s AI-powered multichannel marketing solutions will be integrated into Salesforce’s core offerings, which Salesforce believes will give it an edge with its enterprise solutions.
This is especially true at a time when Wall Street has become concerned about a so-called SaaSpocalypse . Business models of legacy software-as-a-service companies are feared to be under threat as businesses increasingly turn to AI solutions to meet their needs.
“AI is raising the bar for marketers, who now need agentic solutions that can understand customers, make decisions, and act in real time,” Salesforce noted in a release announcing the news, adding that “Braze’s real-time engagement and AI decisioning capabilities are expected to complement all four layers of Salesforce’s architecture — Data 360, Customer 360, Agentforce, and SIForce.”
What is Braze?
While even those outside the tech industry have likely heard of Salesforce, Braze is a much smaller and lesser-known company.
It is headquartered in New York and was originally founded in 2011. Its primary focus is as a multichannel marketing provider for enterprise customers to help them better understand and interact with their consumers.
Braze allows companies to interact with their customers across multiple channels, including WhatsApp, email, mobile websites, and more. In recent years, the company has shifted to AI offerings to better help clients engage with their customers.
Braze currently says it has around 2,770 customers, which include Venmo, Dairy Queen, Instacart, Canva, and more.
The company was private for the first decade of its existence, but went public in 2021 on the Nasdaq.
Braze shares skyrocket 50%
Salesforce’s offer price of $5.66 billion for Braze equates to about a 58% premium over what the company was valued at as of market close yesterday, when BRZE shares closed just above $30.
Given that premium, it’s no wonder that BRZE skyrocketed right after the deal was announced. Currently, as of the time of this writing, BRZE shares are up more than 50% to $45.33 per share. That’s just a little more than $2 below what Salesforce says it will pay for the company.
Still, the stock’s current price is a far cry from its 2021 post-IPO highs.
Shortly after Braze went public, its shares traded at almost $100 per share at one point, according to Yahoo Finance data. But since then—even with today’s 50% gains—BRZE shares have fallen by around 48%.
Of course, while Salesforce has announced its intentions to buy the company, no deal of this size is certain until regulators have signed off and money has actually exchanged hands. And that won’t be during Salesforce’s current fiscal year.
Salesforce says the deal is expected to close during the company’s 2028 fiscal year, which runs from February 1, 2027, to January 31, 2028. It did not give an indication of when during that fiscal year the sale would close.
