EmailSalesforce (CRM $129.69 -1.30) announced that it has entered into a definitive agreement to acquire Buddy Media, the world's leading social media marketing platform, for approximately $689 million payable in cash and salesforce.com equity. The transaction is expected to be completed during salesforce.com's fiscal third quarter ending October 31, 2012, and is subject to customary closing conditions. CRM will acquire Buddy Media for approximately $467 million in cash and $184 mln in salesforce.com common stock, and $38 mln in vested salesforce.com options and restricted stock units. All of Buddy Media's vested and unvested options, restricted stock and restricted stock units held by continuing employees will be assumed and converted into options, restricted stock and restricted stock units of salesforce.com. Given an expected fiscal third quarter close date, this transaction is not expected to have any material impact to salesforce.com's fiscal second quarter FY13 revenue or EPS results, previously guided on May 17, 2012. Salesforce.com expects to provide revenue and EPS guidance for its fiscal third quarter fiscal year 2013, including the effects of this transaction, when it announces results for its second fiscal quarter, ended July 31, 2012. The acquisition is expected to increase revenues by approximately $20 million to $25 million, and to reduce non-GAAP EPS by approximately $0.14 to $0.15 in the second half of the year ending January 31, 2013 depending on the final acquisition date. To reflect the impact of this acquisition, the company is updating the full-year guidance it provided on May 17, 2012.
Specifically, the company now expects fiscal year 2013 revenue in the range of approximately $2.990 billion versus the $3.025 billion (previous guidance $2.97-3.00 billion) versus $2.99 billion CIQ consensus and FY13 non-GAAP EPS in the range of approximately $1.45 to $1.49 (previous guidance 1.60-1.63) vs $1.63 CIQ consensus. The financial impact of the acquisition on a GAAP basis cannot be estimated until the allocation of the purchase price is completed following the closing of the acquisition. However, salesforce.com currently expects that the dilutive impact of the acquisition to EPS will be significantly greater on a GAAP basis than a non-GAAP basis.
