Salesforce, one of the largest B2B cloud computing companies in the world, is acquiring workplace chat app, Slack, for $27.7 billion.

The announcement was made by the two companies on Tuesday, where the acquisition will be in the form of a cash and stock deal.

“Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce’s common stock on November 30, 2020,” the announcement reads.

Slack was one of the fastest growing startups since its launch back in 2009, with over $12 million daily active users using their platform for team collaborations (as of last year). The company went public in 2019, with a valuation of close to $25 billion previously. 

Despite its fast growth, Slack has been facing intense pressure from competitors such as Microsoft and IBM, where a sale to Salesforce seemed like the likely choice.

Salesforce today is worth close to $220 billion, and has transformed into one of the largest software companies in the world through its proprietary customer relationship management software that helps businesses manage sales online.