Salesforce has agreed to buy Braze, a customer-engagement software company, for $47.50 in cash per Class A share, an enterprise value of about $5.66 billion, it said on Tuesday. The company expects to close in its fiscal year 2028, which runs from February 2027 to January 2028, subject to Braze shareholder approval and regulatory clearance.
The press release does not give a premium, an equity value, Braze's revenue or how Salesforce will fund the purchase, and the merger filing does not compare the price with Braze's share price either. The more informative numbers are in Braze's Form 8-K.
What are the terms?
The merger agreement is dated 19 October. Each Class A share converts into the right to receive $47.50 in cash, without interest, according to Exhibit 2.1. Some in-the-money options and RSUs are cashed out, underwater options are cancelled, and other unvested RSUs and performance units convert into Salesforce restricted stock units, the 8-K says.
Conditions include approval by holders of a majority of the outstanding Class A shares, expiry of the Hart-Scott-Rodino antitrust waiting period, other antitrust and foreign-investment approvals and no order that blocks the merger or imposes a "Burdensome Condition." The 8-K does not address financing. Salesforce did not say in its release how it will fund the purchase.
The consideration is all cash: both the release and the 8-K say so, and there is no financing condition in the 8-K's summary of the agreement.
Who pays whom if it fails?
Salesforce would owe Braze $300 million in cash in certain circumstances, including if the merger is not completed by the outside date or a final order permanently prohibits it. Braze would owe Salesforce $191.39 million if its shareholders do not approve, its board changes its recommendation or it terminates to accept a superior proposal.
By this publication's arithmetic, the Salesforce payment is about 5.3 per cent of the enterprise value and the Braze payment about 3.4 per cent. A reverse fee that is larger than the target's own is a sign that the buyer sees regulatory risk, or wants to signal confidence about it. That is our reading, not either company's. The outside date is one year from signing, extendable twice by up to 90 days each to obtain approvals.
Is the vote in hand?
Not yet, but a block of it is. A voting and support agreement lists holders of 5,999,825 Class A shares, including CEO and co-founder Bill Magnuson with 4,258,551 and co-founder Jonathan Hyman with 946,035 plus trust holdings. At $47.50 that is about $285 million. Braze's total share count was not in the documents reviewed, so the share of the vote this represents is unknown. The agreement ends if the price falls or the mix of consideration changes without the holder's consent.
What does Salesforce say it is buying?
Braze has about 2,770 customers, including Canva, Dairy Queen, Equinox, Instacart, Urban Outfitters and Venmo, according to the release. Patrick Stokes, President, Applications and Marketing at Salesforce, said: "Braze was built to turn live customer behavior into personalized engagement at scale." Magnuson said: "Salesforce shares our commitment to marketers, and we'll continue building as Braze."
Salesforce said it anticipates no change to its fiscal 2027 guidance, has not guided fiscal 2028 and has no update to long-term targets. It gave no accretion estimate.
What to watch
The first test is the proxy statement, which normally describes the background of the sale, any other bidders and the projections the bankers used, and should show how the price compares with where Braze shares traded. The second is the HSR review, where the $300 million reverse fee suggests both sides expect questions. That is our reading. Other enterprise-software deals this month, such as Proofpoint's agreement to buy Varonis, will be tested by the same regulators.
The price, enterprise value, closing expectation, customer count and the quotations from Patrick Stokes and Bill Magnuson come from Salesforce's press release of 20 October 2026. The termination fees, outside date, closing conditions, treatment of equity awards and the shareholder vote come from Braze's Form 8-K (Items 1.01 and 8.01) filed 20 October, with the agreement date and $47.50 consideration confirmed in Exhibit 2.1 and the voting-agreement share counts in the Voting and Support Agreement exhibit. The $285 million value of the voting shares and the fee-to-enterprise-value ratios are this publication's arithmetic. The analysis is our own.
Topics technologyacquisitionenterprise softwareM&A
