Cloud software company Twilio buys SendGrid for $ 2 billion

(Reuters) – The cloud communications provider, Twilio Inc., announced on Monday that it would buy SendGrid Inc.'s messaging technology company in connection with a stock-based transaction. total value of about $ 2 billion.

Twilio will offer 0.485 shares for each SendGrid Class A common share. The transaction amounts to approximately $ 36.92 per share, a premium of 19.4% on the closing price of SendGrid at the end of Monday.

The value of equity amounts to approximately $ 1.71 billion, according to calculations based on Refinitiv data.

SendGrid shares rose 14.5% to $ 35.40, while those of Twilio fell 4.5% to $ 73.

Twilio systems allow software developers to automatically send text message notifications or phone calls to customers without having to create their own technological capabilities. Startups such as Airbnb Inc and Lyft Inc use this service to send text message notifications to users, for example.

SendGrid performs a similar function for so-called transactional e-mails, such as receipts or invoices, allowing developers to send them automatically without having to create a system from scratch. In recent years, SendGrid has also proposed tools for email marketing campaigns. Companies that include Uber Technologies Inc [UBER.UL] and Spotify Technology SA use the services of SendGrid.

"In addition to technology, SendGrid also benefits from tremendous customer momentum, which makes this combination particularly powerful," Twilio CEO Jeff Lawson told a conference call.

The companies expect the transaction to be completed in the first half of 2019.

Byron Deeter of Bessemer Venture Partners, who serves on both companies' board of directors, stepped down from the talks, Lawson told investors during a conference call. Bessemer invested in both companies prior to their IPO and holds approximately 13.7% of SendGrid's shares.

Jeff Epstein, Twilio's board member and Bessemer's partner, is also challenged, added Lawson.

"This decision was made between the two companies, without any Bessemer involvement," said Lawson.

Goldman Sachs is the financial advisor for Twilio, while Morgan Stanley is SendGrid's financial advisor.