Intuit confirmed speculations that it was in the process of buying Mailchimp this afternoon, describing a $12 billion deal that will bring the well-known email infrastructure company within its corporate ambit.
Intuit is a relatively unknown name in the world of email marketing. Instead, the corporation is best known for its TurboTax software (and related lobbying of the US government to ensure that its rent-seeking may continue), as well as its recent acquisitions of Credit Karma and Mint. The Mailchimp deal will be made up of both cash and stock.
According to a press release, Intuit believes the transaction will “advance” its objective of powering prosperity throughout the world and “becoming an AI-driven expert platform.” Perhaps this is why they are investing 10% of their market value in an email marketing firm. The company went on to state that by purchasing Mailchimp, it will be able to “accelerate two of [Intuit’s] previously shared strategic Big Bets: to become the center of small business development; and to disrupt the small business midmarket.”
This is a little easier to understand. QuickBooks is a well-known solution in the SMB industry, thanks to Intuit. Intuit probably believes it can sell more services to its current small business customers. Although it appears to be a stretch, we assume that the eggheads have determined that the resulting corporate synergies will more than compensate for the deal’s price shock.
Intuit’s shares are up a smidgeon in after-hours trade, signalling a shrug from Wall Street on the deal; considering how thoroughly leaked the deal was on its approach to completion, the combination may have already been factored into Intuit’s share price.
The transaction is a triumph for Atlanta, where Mailchimp is based. Mailchimp is a well-known bootstrapped company, so if you needed proof that you can develop a decacorn outside of Silicon Valley without relying on venture financing, look no further.