Twilio is buying email API platform SendGrid in an all-stock transaction valued at approximately $2 billion.
At the exchange ratio of 0.485 shares of Twilio Class A common stock per share of SendGrid common stock, this price equates to approximately $36.92 per share based on the closing prices. The transaction is expected to close in the first half of 2019.
According to the companies, adding the leading email API platform to the leading cloud communications platform can drive tremendous value for the combined customer bases. The resulting company would offer developers a single, best-in-class platform to manage all of their important communication channels — voice, messaging, video, and now email as well.
Together, the companies currently drive more than half a trillion customer interactions annualised (annualised data for the quarterly period ended June 30, 2018), and growing rapidly.
“Increasingly, our customers are asking us to solve all of their strategic communications challenges – regardless of channel. Email is a vital communications channel for companies around the world, and so it was important to us to include this capability in our platform,” said Jeff Lawson, Twilio’s co-founder and CEO.
“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.”
Sameer Dholakia, SendGrid’s CEO said, “Our two companies have always shared a common goal — to create powerful communications experiences for businesses by enabling developers to easily embed communications into the software they are building. Our mission is to help our customers deliver communications that drive engagement and growth, and this combination will allow us to accelerate that mission for our customers.”
The boards of directors of Twilio and SendGrid have each approved the transaction which is expected to close in the first half of 2019.
Under the terms of the transaction, Twilio Merger Subsidiary, a Delaware corporation and a wholly-owned subsidiary of Twilio, will be merged with and into SendGrid, with SendGrid surviving as a wholly-owned subsidiary of Twilio.
At closing, 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 the closing price of Twilio Class A common stock on October 15, 2018. The exchange ratio represents a 14 per cent premium over the average exchange ratio for the ten calendar days ending, October 15, 2018.