Intuit this afternoon Confirmed Persistent rumors that it was in the process of buying MailChimp, details of a $12 billion transaction that would bring the famed email infra company to its corporate remit.
Intuit is not a well-known player in the email marketing space. Instead the company is best known for its TurboTax software — and the U.S. government’s affiliated lobbying to ensure that demand for its rents can continue — the recent purchase of Creditkarma, and its more dated acquisition of Mint.
Mailchimp transactions will involve both cash and stock.
The question running through your mind at the moment is correct: Why is Intuit spending 10% of its market capitalization to buy an email marketing company?
According to a release, Intuit believes the deal advances “its prosperity around the world and its strategy to become an AI-powered specialist platform.” Normally at this juncture I’d change the corporate-speak of the company to something in English, but I’m struggling.
The company had more to say, that its Mailchimp purchase would allow it to “accelerate to two”. [Intuit’s] Pre-Shared Strategic Big Bets: To Be The Hub Of Small Business Growth; And to disrupt small business in the middle market. “
It’s a little more messy. Intuit’s Quickbooks service is a well-known product in the SMB sector. Presumably Intuit believes it can sell more services to its existing small business customers. It still seems like a stretch, but we believe Eggs has come to the conclusion that the upcoming corporate synergies will more than offset the sticker-shock that the deal includes.
Shares of Intuit are down 0.15% in after-hours trading, meaning there is some shrug from Wall Street regarding the transaction; Given how well the deal was on its way to ending, the price of the combination may already be in Intuit’s share price.
For Atlanta, where MailChimp is headquartered, the deal is a win. MailChimp is a well-known bootstrapped company, so if you were looking for confirmation that you can build Decacorn outside of Silicon Valley and without venture capital help, here’s the proof.