Marking the biggest acquisition in its history, Salesforce has agreed to pay $6.5 billion in a cash and stock deal for business software company MuleSoft.
The sales software giant announced the deal on Tuesday after Reuters reported that the two companies were in talks. Salesforce said that the deal “represents a 36% premium over MuleSoft’s closing share price” on Monday.
MuleSoft’s (MULE) technology is used by customers to link their business apps, databases, and corporate IT infrastructure into a unified system. Customers include Coca-Cola (KO), Barclays, and Anheuser-Busch.
The acquisition comes a year after MuleSoft went public and spent the year increasing sales while trying to manage its growing losses. In the company’s fourth quarter, it brought in $88.7 million in sales, which was a 60% bump from the previous year during the same time period. Mulesoft had an operating loss of $25.5 million in its fourth quarter, a nearly 100% jump from the $12.8 million operating loss it recorded in the same quarter of the previous year.
MuleSoft CEO Greg Schott told Fortune on the day his company went public that he has always admired Salesforce for popularizing software for managing customers and sales, and turning what used to be an obscure tech product into a multi-billion dollar business that’s expanding into other areas.
Salesforce has been trying to expand from its roots in sales software by acquiring companies that specialize in other products. For instance, Salesforce bought the startup Quip, which makes a Microsoft Word-like product, in 2016 for $582 million.
“Every digital transformation starts and ends with the customer,” Salesforce CEO Marc Benioff said in a statement. “Together, Salesforce and MuleSoft will enable customers to connect all of the information throughout their enterprise across all public and private clouds and data sources—radically enhancing innovation.”
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One way Salesforce plans to use MuleSoft’s technology is to embed it in the Salesforce Integration Cloud, a service that lets customers more easily access corporate data wherever it may be stored.
Salesforce’s (CRM) last big deal was in 2016 when it bought the e-commerce system software company Demandware for $2.8 billion, which was the largest deal the company ever made at the time.
Salesforce shares fell 2.33% in after-hours trading on Tuesday to $122.20 after being relatively flat in regular trading. MuleSoft’s shares jumped 4.57% in after-hours trading to $43.92 after rising nearly 27% in regular trading.