M&A – December 22, 2023

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M&A – December 22, 2023

Warner Brothers (WBD) and Paramount (PARA)

Warner Brothers and Paramount are exploring a potential merger. The content space needs further consolidation. As discussed in the Disney section, cord cutting means content creators losing centralized linear distribution outlets. If streamers want their services to garner that same traffic visibility, there likely need to be fewer players with larger content libraries. This would be a big piece to move in that equation. Combining Paramount with HBO would create another content powerhouse in the U.S. and could potentially be these two companies fattening up their libraries and potential multiples on a potential sale to mega-cap tech.

Salesforce (CRM)

Salesforce announced plans to acquire Spiff. This is a sales commission software firm that automates and fully services these employer-employee transactions. It tracks commission data, predicts future commissions, designs incentive plans and streamlines this form of payment. The company is very small, so this likely wouldn’t be material to results. I was a bit surprised to hear this news considering CRM disbanded its M&A team to focus on organic growth. Still, the tuck-in nature of this small purchase makes the deviation from this guidance pretty unconcerning.

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