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Intuit’s $12bn Acquisition of Mailchimp

By Mikail Boudouda and Florent Onguen (Grenoble École de Management), Claire Zhong (Wharton School)

Photo: Brett Jordan (Unsplash)


Overview of the deal

Acquirer: Intuit

Target: Mailchimp

Total Transaction Size: $12 billion

Announcement date : September 13th 2021

Closed date: End of January 2022 (According to Intuit’s CEO)

Acquirer advisor: Morgan Stanley

Target advisor: Qatalyst Partners

​​The management and accounting software provider Intuit has announced the acquisition of email marketing company Mailchimp for a sum of $12 billion. The largest deal of Intuit’s history will be financed with cash on hand and approximately $4.5 to $5 billion in new debt. The price includes about $300 million of assumed Mailchimp employee transaction bonuses that will be issued in the form of restricted stock units, expensed over three years. The deal is expected to accelerate Intuit's goal of being a catalyst for the growth of small and medium-sized businesses.

Company Details (Acquirer - Intuit)

Intuit is an American company specialized in financial software. The company currently operates on four different segments: Small business & Self-employed, Credit karma, Consumer and ProConnect. Each segment offers its own solutions, such as TurboTax, a tax preparation application, QuickBooks, a small business accounting program, and Mint, a personal finance app.

Founded in 1983, headquartered in Mountain View, California, United States

CEO: Sasan Goodarzi

Number of employees: 10600

Market Cap: $147,3 bn (as of 30/09/2021)

EV: $145,9 bn

LTM Revenue: $9,6 bn

LTM EBITDA: $2,8 bn

LTM EV/Revenue: x15.2


Company Details (Target - Mailchimp)

Mailchimp is a comprehensive marketing platform that gives consumers an easy place to digitally promote their business across various social media, email, and websites. Mailchimp’s products are designed as SaaS offerings and are mostly provided on a subscription basis. They operate globally and serve more than 100 countries around the world.

Founded in 2001, headquartered in Atlanta, Georgia

CEO: Ben Chestnut

Number of employees: 800

Revenue (2020): $700M

Projections and Assumptions

Short-term consequences

According to Intuit data, after 5 years, 50% of small businesses fail and what they need is to solve their number one problem: getting and keeping customers. Thus, the opportunity that this deal provides in the short term is to concentrate Intuit's strengths in serving small and medium-sized businesses (accounting and management software) and those of Mailchimp with marketing automation, to offer a global growth solution for these companies. In practical terms, Intuit intends to expand its range of services to businesses. Through a single platform, customers will be able to digitize their business, promote their activity, retain customers via new marketing solutions, and have all the Quickbook functionalities to pay and be paid. This will create a synergy between customer data and purchase data. Intuit will therefore be a complete platform for the management of small businesses: from the creation of their website to the acquisition and retention of customers, via audience analysis, invoicing, payroll and accounting.

Long-term Upside

With the acquisition of Mailchimp, Intuit will accelerate two of its previously-shared strategic bets: to become the center of small business growth; and to disrupt the small business mid-market. Intuit and Mailchimp will work together to deliver on the vision of an innovative, end-to-end customer growth platform for small and mid-market businesses, allowing them to get their business online, market their business, manage customer relationships, benefit from insights and analytics, get paid, access capital, pay employees, optimize cash flow, be organized and stay compliant, with experts at their fingertips. Small and mid-market businesses will have the power to combine their customer data from Mailchimp and QuickBooks’ purchase data to get the actionable insights they need to grow and run their businesses.

“Together, Mailchimp and QuickBooks will become a powerful engine for small and mid-market business customers to get, engage and retain their customers, run their businesses, optimize cash flow and remain compliant,” said Alex Chriss, Executive Vice President and General Manager of the Intuit Small Business and Self-Employed Group. “Today, QuickBooks helps more than 7 million small and mid-market businesses get paid fast, access capital, pay their employees, and grow in an omnichannel world. Mailchimp’s addition will bring speed and velocity to these efforts, with the acceleration of mid-market expansion opportunities and global growth for both brands.”

Risks and Uncertainties

“We’re focused on powering prosperity around the world for consumers and small businesses. Together, Mailchimp and QuickBooks will help solve small and mid-market businesses’ biggest barriers to growth, getting and retaining customers.” - Sasan Goodarzi, CEO of Intuit

Given the magnitude of the deal, Intuit expects the Mailchimp acquisition to have revenue and cost synergies, but challenges in integration still loom large. Merging the accounting software QuickBooks and Mailchimp carries distinct risks. For one, the post-merger agreement entails sharing data of more than 2 million monthly Mailchimp users, which can be susceptible to cyber-attacks or data breaches if not handled diligently. Moreover, information silos resulting from key staff members leaving the business involve the risk of losing valuable customer data and insights, an element that Intuit sees as an important driver of expanding into the SME customer segment. Any issues with data sharing can hurt the reputations of firms on both sides and significantly impact the day-to-day operations of the combination. In addition, the marketing automation software market is rather crowded and fragmented, with players ranging from Big Tech such as Oracle to horizontally integrated Customer Relationship Management firms. The intense rivalry is marked by the presence of open-source and freemium marketing tools, offerings that largely appeal to the SME segment and potentially impede the growth of the overall market. Hence, whether Intuit will be able to successfully reap the benefits from integration is a sizable source of uncertainty, and investors will closely watch the post-merger developments going forward.


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