Braze: Leaning Back Into Acquired Growth

Morgan Stanley comments on Salesforce's agreement to acquire Braze for $47.50/share in cash, representing ~$5.66B enterprise value and ~6x EV/NTM sales, a modest discount to historical Salesforce M&A and largely in line with software M&A since 2023. The deal adds real-time, mobile-first customer engagement capabilities to Marketing Cloud, is expected to close in FY28 (CY27) subject to approvals, with no change to FY27 guidance. Management framed the deal around customer success and strategic fit, acceleration, and value, emphasizing growth synergies over near-term profitability: assuming 20% Braze topline growth, the deal adds ~2% to CRM's reported growth and ~20bps to pro forma topline, but is ~1% dilutive to non-GAAP EPS in FY28/29, with no defined profitability accretion timeline. The product story improves, yet isolating organic from acquired growth becomes harder. Equal-weight, PT $235 (close $242.45 on Oct 19);