After a month of acquisition talks, Intuit confirmed Monday that they will acquire Mailchimp for $12 billion in a cash and stock deal. Mailchimp is a customer engagement and marketing platform used by small and mid-sized businesses. The technology-based Intuit currently owns QuickBooks, TurboTax, Mint and Credit Karma. The deal is subject to customary regulatory approvals and is expected to close before the end of Intuit’s second quarter of fiscal 2022.
Intuit said the acquisition will help the company achieve two of its strategic goals, including supporting small business growth and disrupting the small business mid-market. Once complete this multi-billion-dollar acquisition will give Intuit a range of free, paid and subscription-based products and services for small businesses.
Intuit CEO remarks
“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,” said Sasan Goodarzi, CEO of Intuit, in a September 13, 2021 news release.
“Expanding our platform to be at the center of small and mid-market business growth helps them overcome their most important financial challenges. Adding Mailchimp furthers our vision to provide a end-to-end customer growth platform to help our customers grow and run their businesses, putting the power of data in their hands to thrive,” Goodarzi added.
Founded in 2001, Mailchimp will help expand Intuit’s customer reach through their email marketing solutions, customer engagement and marketing automation. Mailchimp will bring the following to Intuit:
- A global customer base of 13 million total users, 2.4 million monthly active users, and 800,000 paid customers. Half of Mailchimp’s customers are outside the U.S.
- 70 billion contacts and more than 250 partner integrations accessible
- AI-powered automation that supports 2.2 million daily-AI driven predictions
Mailchimp CEO and co-founder Ben Chestnut commented on the acquisition.
“Over the past two decades, we’ve vastly expanded and evolved Mailchimp’s platform to help millions of small businesses around the world start and grow. With Intuit, we’ve found a shared passion for empowering small businesses. By joining forces with Intuit, we’ll take our offerings to the next level, leveraging Intuit’s AI-driven expert platform to deliver even better products and services to small businesses. This is an exciting new chapter for Mailchimp, our 1,200+ dedicated employees, and customers,” Chestnut said.
Alex Chriss, executive vice president and general manager of the Intuit Small Business and Self-Employed Group, also shared his thoughts on the deal.
“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. Today, QuickBooks helps more than 7 million small and mid-market businesses get paid fast, access capital, pay their employees and grow in an omni-channel 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,” Chriss said.
According to Intuit’s announcement, the acquisition is expected to be accretive to Intuit’s non-GAAP earnings per share for the full fiscal year 2022. Intuit will pay total consideration of approximately $12 billion for the acquisition. The sale price includes approximately $300 million of Mailchimp employee transaction bonuses that will be paid in restricted stock and expensed over three years.
The balance due will be paid in equal amounts of cash and Intuit common stock at a price of $562.51 per share (the daily volume-weighted average sales price per share for the five trading days ending on September 8, 2021). After the transaction is complete, Intuit will issue $200 million in restricted stock to Mailchimp employees: $140 million will be expensed over four years and the remaining $60 million be expensed over six months. The cash portion of the sale will be funded through cash on hand and new debt between $4.5 billion and $5.0 billion.
Credit Karma acquisition
Credit Karma is Intuit’s most recent acquisition. The deal closed in December 2020 for $3.4 billion in cash and 13.3 million shares of Intuit stock and equity awards with a value of $4.7 billion. At the time of the deal, Credit Karma, a consumer financial services app, had more than 110 million members in the U.S., Canada and the U.K.
This is a big deal – literally! Intuit will further grow its financial products and services for small to mid-sized businesses, enabling the company to expand into new markets using AI-powered automation. This further strengthens Intuit’s Small Business and Self-Employed Group. In its fourth quarter fiscal year 2021 for the period ended July 31, 2021, the company reported they had total revenue of $2.6 billion, a 41% increase year-over-year. The Small Business and Self-Employed Group revenue was $1.3 billion, a 19% increase, year-over-year, and half of total revenue. Upon completion of the acquisition, revenue realized from Mailchimp will add to that sizable pot.