Intuit to buy Mailchimp for $12 bln in a cash-and-stock deal

Intuit Inc, known for its small business accounting as well as DIY tax filing program, said Monday it will acquire digital marketing firm Mailchimp for about $12 billion in a cash and stock deal.

The deal, expected to close in the second quarter of the fiscal year 2022, is the largest acquisition in Intuit's history. Intuit said it will be funded with available cash and new debt of between $4.5 billion and $5.0 billion. Last year, the company bought the personal finance portal Credit Karma for just over $7 billion.

The deal for Atlanta-based Mailchimp, which operates a marketing platform for small and medium-sized businesses, will help Intuit add information to its Quickbooks platform that tracks spending.

“There is an incredible power in combining customer data with purchase data, and we wanted to put the power of data in the hands of our customers,” said Sasan Godarzi, CEO of Intuit.

The deal comes at a time when fintech companies such as Intuit are benefiting from recovery from the pandemic-induced downturn among small businesses. The company expected earnings and revenue levels above estimates for the 2022 fiscal year.

Founded in 2001, Mailchimp traces its roots to a web design agency called Rocket Science Group, whose founders Ben Chestnut and Dan Kurzius began targeting large corporate clients, according to their website.

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They closed the agency in 2007 to focus exclusively on Mailchimp, which they ran as an email marketing service for small businesses. Without outside funding, the company was profitable and selling to more than 12 million customers around the world.

Mailchimp reported $800 million in profits in 2020, a 20% year-over-year increase. Half of their income comes from outside the United States. The company will continue to be headquartered in Atlanta, Georgia, and will operate under its current brand after the acquisition.

Intuit's products, based in Mountain View, California, include TurboTax, a program that helps Americans file income tax returns, and QuickBooks, a cloud-based application that helps small businesses manage their income tax returns and payments.

Intuit, started by Scott Cook and Tom Proulx in 1983, went public 10 years later and now has more than 10,000 employees in 20 offices in nine locations around the world.

The transaction is expected to add to Intuit's adjusted earnings for the full 2022 fiscal year.

The two companies began discussing partnerships over a year ago, and those discussions later evolved to talk about an acquisition. Bloomberg reported on the talks in early September.

Morgan Stanley served as a financial advisor to Intuit, with Latham & Watkins as legal counsel. Advised by Qatalyst Partners, King & Spalding LLP Mailchimp.

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