Another day, another big deal for Intuit CEO Sasan Goodarzi — this time a $12 billion transaction for email marketer Mailchimp months after spending $7.1 billion to scoop up credit monitoring outfit Credit Karma.
For the deal-making Goodarzi, the strategy is simple: bring in new technologies, and grow Intuit even faster as a result.
“We want to grow the company double-digits. We want our operating income to grow faster than our revenue, and we want to put our capital to great use. Both Credit Karma and Mailchimp really allow the company to leap forward five to 10 years. They bring us capabilities that frankly, we have only experimented with, that we tried to build. What we realized is what they have done we could also do, but it would take us 10-plus years,” Goodarzi said on Yahoo Finance Live.
Intuit said late Monday it would acquire Mailchimp for $12 billion in a mix of cash and stock advances to employees. Mailchimp will bring Intuit 13 million total users globally, 2.4 million monthly active users and 800,000 paid customers. The company boasts 70 billion contacts and 250-plus partner integrations.
Intuit believes Mailchimp will be accretive to its fiscal year 2020 earnings per share.
Shares of Intuit rose about 3% on the news. The stock was up 2% Tuesday afternoon.
Analysts generally voiced support for the transaction for several reasons.
First, Intuit doesn’t appear to have overpaid to buy Intuit which should help bolster the long-term return profile of the asset. Second, Intuit has shown solid early success in integrating Credit Karma and driving synergies from the deal — providing hope it could do the same with Mailchimp.
And lastly, Mailchimp will give Intuit more data from which to sell its other services such as Quickbooks to lucrative small businesses.
“Overall, we like this deal. While the $12 billion price is Intuit’s biggest ever, Mailchimp instantly brings a scaled presence in the front office with a broad product portfolio and $800 million plus in mostly recurring revenues. The deal helps realize Intuit’s vision of becoming a complete platform for small businesses, spanning both front and back office,” Jefferies analyst Brent Thilll said.