By Mikail Boudouda and Florent Onguen (Grenoble École de Management), Claire Zhong (Wharton School)
Overview of the deal
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
LTM EV/EBITDA: x50.1
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
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.
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.