Business communications platform Twilio announced last week it has reached an all-stock deal for email specialist company SendGrid for $3 billion.

The Terms of the Deal

When plans for the acquisition were initially announced four months ago, the original amount of the deal was for $2 billion. However, due to the rising price of both company’s stocks since the initial announcement, that price was raised by an additional $1 billion. In the deal, SendGrid shareholders received $53.99 of aggregate value per share of SendGrid common stock. This number represents an exchange ratio of 0.485 shares of Twilio Class A common stock per SendGrid share based on Twilio’s January 31, 2019 closing price.

Filling a Need

Twilio – which had a reported value of $2 billion at its IPO in 2016 – allows software developers to make and receive phone calls, send and receive texts, and perform other communications via its web services API’s. SendGrid is a customer communications platform specializing in transactional and marketing emails. The merging of the two companies fills a hole in Twilio’s communication offerings. After the acquisition, Twilio will command a platform offering complete phone, text, and email communication capabilities.

A Satisfied CEO

According to Twilio co-founder and CEO Jeff Lawson, “Effective customer engagement is a strategic imperative for every company. With SendGrid now a part of Twilio, our goal is to provide a complete platform for every form of customer engagement. Through our mutual developer-first approach, we empower the builders of the world to create magical customer experiences unique to every interaction.”

A Mutually Beneficial Merger

Together, the two companies manage more than 140,000 active customer accounts which are responsible for more than 600 billion annualized interactions. According to SendGrid CEO Sameer Dholakia, “As we join forces today, I’m more confident than ever that we can accelerate our vision of creating one unquestioned platform of choice for developers and companies around the world and help them transform the way they engage with their customers.”