Slack CEO and cofounder Stewart Butterfield was already a billionaire before rumors began floating that Salesforce would buy work-communication tool Slack. But in a deal announced Tuesday after markets closed and valued at over $27 billion, Salesforce’s agreement to purchase Slack lifted Butterfield’s net worth by more than $200 million, Forbes calculates.
Per the terms of the acquisition, disclosed in a Salesforce press release, Slack shareholders will get 0.076 shares of Salesforce stock for each Slack share, plus $26.79 per share in cash. Butterfield owns more than 39 million shares of Slack; once the deal goes through, his holdings will convert to a little over 3 million shares of Salesforce, currently worth about $725 million. (The software giant’s stock, which has soared nearly 50% in the past year, closed at $241.35 on Tuesday.)
Butterfield is also set to receive just over $1 billion in cash for his Slack shares, but he’ll likely pay an estimated $390 million in state (California) and federal capital gains tax, netting him about $660 million. Combine that with an estimated $67 million that Butterfield has netted from selling over three million shares of Slack, and he’s worth around $1.45 billion.
That’s about $235 million more than he was worth a week ago. Shares of Slack shot up about 37% last Wednesday, following a report about the forthcoming deal by the Wall Street Journal. Butterfield was worth slightly more than $1.2 billion on Tuesday, November 24 before news of a possible deal broke. Representatives for Slack did not respond to a request by Forbes to comment on Butterfield’s net worth.
Following Salesforce’s acquisitions of data visualization platform Tableau and tech integration program Mulesoft, the Slack purchase is Salesforce’s third major purchase over the past two years. The software giant is betting that the pandemic-prompted surge in working from home will continue to fuel the need for communication software like Slack. Prior to the news last week of Salesforce possibly acquiring Slack, the stock of the email-replacement tool had not risen nearly as much in percentage terms as other shelter-at-home stalwarts like Zoom, Netflix and Peloton. The challenge will be whether Salesforce can significantly broaden Slack’s customer base and capabilities.
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Butterfield became a billionaire with an estimated net worth of $1.6 billion after Slack’s June 2019 IPO. The Canadian native called his company’s latest deal “the most strategic combination in the history of software” in a Salesforce statement about the acquisition.
Source: Forbes – Money