Cloud software firm Twilio to buy SendGrid in $2 bln deal
(Adds comments from Twilio CEO, board member recusals)
Oct 15 (Reuters) - Cloud communications provider Twilio Inc
said on Monday it would buy email technology firm
SendGrid Inc in an all-stock deal valued at about $2
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 as of
The equity value is about $1.71 billion, according to
calculations based on Refinitiv data.
SendGrid shares rose 14.5 percent to $35.40 in extended
trading, while Twilio fell 4.5 percent to $73.
Twilio's systems let software developers automatically send
text-message notifications or phone calls to customers without
having to build out the technological capabilities themselves.
Startups such as Airbnb Inc and Lyft Inc use the service to send
text message notifications to users, for example.
SendGrid performs a similar function for so-called
transactional emails like receipts or invoices, letting
developers send them automatically without having to build out a
system from scratch. In recent years SendGrid has been offering
tools for email marketing campaigns as well. Firms such as Uber
Technologies Inc and Spotify Technology SA
use SendGrid's services.
"In addition to the technology there's also the sizable
customer base momentum that SendGrid has that makes this
combination particularly powerful," Twilio Chief Executive Jeff
Lawson told analysts on a conference call.
The companies expect the deal to close in the first half of
Byron Deeter of Bessemer Venture Partners, who is on the
boards of both companies, recused himself from the deal talks,
Lawson told investors on a conference call. Bessemer invested in
both firms before they went public and owns about 13.7 percent
of SendGrid's shares.
Jeff Epstein, a Twilio board member who is a partner at
Bessemer, also recused himself, Lawson added.
"This decision was made between the two companies, without
any involvement from anyone at Bessemer," Lawson said.
Goldman Sachs is the financial adviser to Twilio, while
Morgan Stanley is SendGrid's financial adviser.
(Reporting by Arjun Panchadar in Bengaluru and Stephen Nellis
and Jane Lanhee Lee in San Francisco
Editing Matthew Lewis and Richard Chang)
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