Endurance International Group announced on Monday that it will acquire email marketing platform Constant Contact in a deal worth $1.1 billion.
According to the announcement, Endurance will leverage the acquisition to extend its portfolio of services for small and medium-sized businesses. Constant Contact’s solutions include email marketing, events management, social media integration, and contact management systems. Most recently, it launched a new Facebook advertising tool for SMBs.
The transaction, approved by both companies’ boards of directors, represents a multiple of 12x 2015 estimated adjusted EBITA and a premium of approximately 23 percent over Constant Contact’s closing price of $26.10 on Oct. 30, 2015.
“We couldn’t be more pleased to welcome Constant Contact to our team and our family of brands. We have long admired Constant Contact and its strong management team, and all that it has accomplished in building a great product set, as well as building an influential culture and team,” Hari Ravichandran, president and chief executive officer of Endurance said in a statement. “Their focus on the customer and product development complements our offerings for small business services, and expands our ability to address the needs of SMBs. We know that once small businesses have a web presence, they look for other products and services that will help them to grow their business. We see an opportunity to help our growing subscriber base meet their goals through an integrated suite of solutions, and we are excited to add this talented team to our roster.”
The transaction is expected to close during the first quarter of 2016. The purchase price will be paid in cash to Constant Contact shareholders.
“Our team has always been passionate about helping small businesses do more business. Joining the Endurance family of brands will allow us to extend our reach and be a better partner to small businesses across the globe. We have long shared a parallel path—from our focus on SMBs, to technology, to talent—and we believe this transaction will build continued value for all constituents,” Constant Contact CEO Gail Goodman said.
In its third quarter 2015 results, announced on Monday, Endurance announced that GAAP revenue increased 18 percent from Q3 2014 to $188.5 million, and adjusted revenue for the quarter increased to $190.3 million over the same period a year ago.
Total subscribers reached 4.482 million, and average revenue per subscriber was $14.29 compared to $14.49 for Q3 2014.