Cloud technology company Twilio is set to buy e-mail technology firm SendGrid in an all-stock deal valued at about $2 billion, Reuters reported.
Twilio’s technology helps its customers like Airbnb and Lyft send text and other types of messages to its users. SendGrid focuses on e-mail.
“We started Twilio by building voice, then SMS, video, web and mobile chat, channels like Facebook Messenger, WhatsApp. Along the way, email has been something that customers have asked us about,” Twilio CEO Jeff Lawson said.
SendGrid CEO Sameer Dholakia said that many of Twilio’s products fetch a higher amount of revenue per user than do SendGrid’s. The email firm, which will operate as a standalone unit within Twilio under Sameer Dholakia, could boost its revenue by selling Twilio services to SendGrid customers. The two have few joint customers.
Twilio will offer 0.485 share of its stock for each SendGrid Class A common share. The deal is worth about $36.92 per share, a premium of 19.4 percent to SendGrid’s closing price on Monday.
Pat Walravens, an analyst for JMP Securities, said the deal is at 10 times of SendGrid’s 2019 revenue. Salesforce.com recently acquired MuleSoft for a price equal to 12 times MuleSoft’s future revenue.
Goldman Sachs is the financial adviser to Twilio, while Morgan Stanley is SendGrid’s financial adviser.