a close up of a logo: The Twilio (TWLO) logo is displayed over a white background on a smartphone screen.


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The Twilio (TWLO) logo is displayed over a white background on a smartphone screen.

Twilio (NYSE:TWLO) stock is on the rise Monday following merger and acquisition (M&A) news that it’s acquiring Segment for $3.2 billion.



a close up of a cell phone screen with text: The Twilio (TWLO) logo is displayed over a white background on a smartphone screen.


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The Twilio (TWLO) logo is displayed over a white background on a smartphone screen.

Twilio won’t be spending cash to acquire the cloud data company. Instead, it’s going to fund the entirety of the $3.2 billion purchase price with shares of TWLO stock. This will have Segment becoming a division of Twilio.

Twilio notes that the deal will improve its customer engagement offerings to developers and companies. It will also increase its total addressable market to $79 billion. It notes that this should speed up its growth plans.

Jeff Lawson, co-founder and CEO of Twilio, said the following about the M&A news.

“Combined with Twilio’s Customer Engagement Platform, we can create more personalized, timely and impactful engagement across customer service, marketing, analytics, product and sales. We are thrilled to welcome Segment to the Twilio team.”

Twilio points out that the transaction has the support of both companies’ Boards of Directors. The deal still needs to complete customary closing conditions before completion. That includes approval from regulators and shareholders. So long as there’s no trouble in these areas, the deal is on target to close in the fourth quarter of 2020.

The deal has Twilio getting financial advice from Morgan Stanley and legal advice from Cooley LLP. Segment’s financial and legal advisors for the deal are Qatalyst Partners and Goodwin Procter, respectively.

TWLO stock was up 7.5% as of Monday afternoon.

On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.

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a man holding a sign: A banner for communications software provider Twilio Inc., hangs on the facade at the NYSE to celebrate the company's IPO in New York City


© Reuters/Brendan McDermid
A banner for communications software provider Twilio Inc., hangs on the facade at the NYSE to celebrate the company’s IPO in New York City


(Reuters) – Cloud communications platform provider Twilio Inc plans to buy customer data infrastructure company Segment for $3.2 billion, Forbes reported on Friday.

The deal, which had not been finalized as of Friday afternoon, was expected to be at least partially based on Twilio stock, the report added, citing two sources it did not name.

San Francisco-based Segment has recently been open to acquisition offers, according to the report.

Twilio declined to comment to Reuters. Segment was not immediately available for comment outside regular business hours.

Segment raised $175 million in a Series D funding round in April 2019. The startup said in September that it worked with more than 20,000 businesses including Intuit, FOX and Levi’s, employing more than 550 people.

Cloud companies have seen a surge in demand this year as more businesses use their services to meet the demands of the switch to work from home due to the coronavirus outbreak.

“Twilio is a beneficiary of pandemic-catalyzed digital transformation acceleration,” brokerage JP Morgan said in a note this month.

Last week, Twilio estimated third-quarter sales above its previous forecast, as the switch to remote working and learning boosted demand for cloud services.

(Reporting by Juby Babu and Kanishka Singh; Editing by William Mallard)

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