Twilio (TWLO) will acquire mass email sender SendGrid (SEND) in an all-stock transaction that is valued roughly at $2 billion. Both the companies jointly announced the deal Monday after-market hours. This deal will combine the acquired company’s email technology into the acquirer’s platform, which combines voice, video, and chat.
Twilio stock, which hit an intraday low of $66.74 during the first hour of Tuesday’s trading session, recovered from the early losses during mid-day, but still traded in the red zone. Shares of the email API platform, which will become a subsidiary of Twilio after the transaction is completed, were trading up about 15% during mid-day.
The transaction, which is targeted to be completed in the first half of 2019, was approved by both the boards. Under the deal terms, each outstanding share of SendGrid common stock will be converted into the right to receive 0.485 shares of Twilio Class A common stock, which represents a per share price for SendGrid common stock of $36.92 based on Monday’s closing price of Twilio Class A common stock.
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San Francisco based-Twilio makes software for secure messaging platforms and the Denver-based SendGrid sends transactional and marketing emails on behalf of the companies to their customers through a cloud-based solution. SendGrid claims to have over 74,000 paying customers like eBay, Spotify, Uber, GrubHub, Booking.com and Airbnb to send over 45 billion emails every month.
Commenting on the deal, Twilio’s CEO Jeff Lawson said, “The two companies share the same vision, the same model, and the same values. We believe this is a once-in-a-lifetime opportunity to bring together the two leading developer-focused communications platforms to create the unquestioned platform of choice for all companies looking to transform their customer engagement.”
Both companies will report their respective financial results for the third quarter ended September 30, 2018, on November 6, 2018. Twilio and SendGrid announced that they have exceeded their Q3 outlook provided on August 6 and July 31, respectively.
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