An announcement that Twilio Inc. (NYSE: TWLO) would be making a multibillion-dollar acquisition lifted shares on Monday. But what is Twilio actually getting with this deal?
Twilio said that it would be acquiring Segment for roughly $3.2 billion in an all-stock deal. The $3.2 billion price tag is for Twilio Class A common stock, on a fully diluted and cash-free, debt-free basis.
Segment is one of the world’s leading customer data platforms. Its platform democratizes access to reliable data for all teams and offers a complete toolkit to standardize data collection, unify user records and route customer data into any system where it is needed. Currently, over 20,000 companies use Segment to make real-time decisions, accelerate growth and deliver compelling user experiences.
In simpler terms, Segment lets its developers break down data from its customers and create a more complete picture. With Twilio’s help, the combined company will be capable of creating a more personalized engagement across its platform, whether it is for customer service, marketing or analytics.
Ultimately, Twilio is looking for this deal to accelerate its growth with a combined total addressable market of $79 billion.
The transaction is expected to close in the fourth quarter of 2020. The boards of directors of Twilio and Segment have each approved the transaction.
Excluding Monday’s move, Twilio stock had outperformed the broad markets with a gain of 212% year to date. In the past 52 weeks, the share price was up closer to $178%.
Twilio stock traded up 2.5% at $313.72 early Monday, in a 52-week range of $68.06 to $310.64. The consensus price target is $312.27.
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