Under the terms of the buyout, Salesforce will pay $2.8 billion for the publicly-trading company and will offer $75 per outstanding share in Demandware -- a premium on the trading price at the time of writing at $48 per share.
Demandware supplies e-commerce cloud solutions to clients including Design Within Reach, Lands' End, L'Oreal and Marks & Spencer across the web, mobile and social media platforms.
The firm's share price increased by over three percent after the announcement was made public.
San Francisco, Calif-based Salesforce is a global cloud and customer relationship manager (CRM) solutions provider which caters for approximately 150,000 small businesses and enterprise clients. The company says the acquisition "will extend the company's CRM leadership and position it to capture [the] multi-billion dollar digital commerce market with what will be the new Salesforce Commerce Cloud."
The company says Salesforce customers will have access to the cloud commerce platform and Demandware's customers will be able to leverage Salesforce's sales, service, marketing, communities, analytics, IoT and platform solutions to deliver "a more comprehensive, personalized consumer experience."
The acquisition highlights what could be a game changer for Salesforce as the company makes a push into the e-commerce market.
While the company will now have access to Demandware clients and will be able to expand its client base -- and potentially upsell Salesforce solutions in the process -- taking on an e-commerce platform itself rather than simply providing the necessary systems to third-parties is an indicator of the next market Salesforce wants to crack.
"Demandware and Salesforce share the same passionate focus on customer success," said Tom Ebling, CEO of Demandware. "Becoming part of Salesforce will accelerate our vision to empower the world's leading brands with the most innovative digital commerce solutions that enable them to connect 1:1 with customers across any channel."
The transaction is expected to close in Q2 2017, ending July 31.