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Intuit Inc (Nasdaq: INTU ) announced Monday it will buy privately held digital marketing company Mailchimp for $12 billion in cash and stock, uniting the two providers of services for small businesses.
Intuit, best known for its popular financial software TurboTax and QuickBooks, said the acquisition will boost its offerings for businesses looking for ways to reach and service customers online.
The announcement confirmed a Bloomberg News report last month that Mailchimp — a 20-year-old company whose offerings include email campaigns, social advertising, shoppable links and automation products — was exploring the possibility of a sale of all or part of itself.
In a statement, Ben Chestnut, Mailchimp’s co-founder and chief executive officer, said, “With Intuit, we’ve found a shared passion for empowering small businesses. By joining forces with Intuit, we’ll take our offerings to the next level, leveraging Intuit’s AI-driven expert platform to deliver even better products and services to small businesses.”
“This is an exciting new chapter for Mailchimp, our 1,200+ dedicated employees, and customers,” Chestnut added.
Fortune noted that since its 2001 founding, Mailchimp has never received outside funding or venture capital backing, unlike many other tech startups.
The Atlanta-based company now has 13 million users, ranging from entrepreneurs to small businesses and Fortune 100 companies.
Together, Mailchimp and Intuit plan to help companies market online, manage customer relationships and access capital, they said.
The deal is expected to close before the end of Intuit’s fiscal second quarter ending January 2022 and add to adjusted earnings per share for the full fiscal year ending July 2022.
Intuit said it plans to finance the cash portion of the transaction through cash on hand and new debt of approximately $4.5 billion to $5 billion.
It marks Intuit’s largest deal to date, surpassing the $7.1 billion the company paid last year to acquire fintech startup Credit Karma Inc.
Intuit has been looking to capitalize on the economic recovery as small businesses get back on track following pandemic-related disruptions.
Intuit’s chief executive officer Sasan Goodarzi said, “Expanding our platform to be at the center of small and mid-market business growth helps them overcome their most important financial challenges.”
“Adding Mailchimp furthers our vision to provide an end-to-end customer growth platform to help our customers grow and run their businesses, putting the power of data in their hands to thrive,” he said.
Intuit was advised by Morgan Stanley, while Mailchimp was advised by Qatalyst Partners.
Source: Equities News