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Salesforce pays $300 million for Salesforce.org merger

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Salesforce will pay $300 million to merge with its external philanthropic arm Salesforce.org in a deal that will grow the software giant’s annual revenue by $150 million to $200 million, the company announced on Monday.

Salesforce.org is an official Salesforce software reseller which distributes grants and puts the company’s software into the hands of nonprofits and educational organizations at a discount or for free. With the new structure, the group’s discounted sales revenue will roll into Salesforce’s topline.

Rob Acker, CEO of Salesforce.org, will continue to run the unit as an industry vertical focused on non-profits and education, akin to Salesforce’s marketing cloud vertical and sales cloud vertical.

As part of the deal, Salesforce.org which switch from being a California public benefit corporation to a California business corporation, according to the release.

The $300 million merger fee will go to the Salesforce.com Foundation, an independent non-profit.

Read more: The new co-CEO of Salesforce explains how the $124 billion cloud company’s ‘fourth’ act is using AI to give its customers the ‘Holy Grail’

Salesforce updated its guidance for fiscal year 2020 to reflect the merger. The company forecasts that its full year revenue will grow $150 million to $200 million because of the combination. The company said in early March that it expects to make $15.95 billion to $16.05 billion in revenue in 2020.

It also expects to see adjusted earnings per share of $2.54 to $2.56 for Fiscal 2020, down from its March forecast of $2.74 to $2.76 per share.

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