Salesforce to Buy Cloud-Platform Firm Heroku

Salesforce said it would pay
$212 million net of cash. It also plans to issue $27 million in stock to
Heroku employees and pay $10 million in cash for unvested Heroku shares
as part of the deal.

Salesforce expects the deal to hurt fourth-quarter adjusted earnings by 2 cents a share and by 12-13 cents a share in fiscal 2012.

The company added it does not expect Heroku to contribute materially to revenue till fiscal 2012.

San
Francisco-based Heroku is a cloud-software platform company which
charges developers to host applications written in the Ruby programing
language on its servers.

Ruby is a
programing language used to write social and mobile applications for
Internet firms like Groupon, Hulu and Twitter. More than 105,000 web
apps run on Heroku’s application platform, according to the company.

Salesforce,
which competes with SAP AG, Microsoft, Oracle and NetSuite, specializes
in cloud computing services which run software applications on its
computer servers on behalf of clients.

The
company’s shares, which have rise 26 percent since it posted strong
quarterly results last month, closed at $145.24 on Tuesday on the New
York Stock Exchange.

(Reporting by Himank Sharma in Bangalore; Editing by Roshni Menon)