Twilio Inc. agreed to buy digital communications platform SendGrid Inc. in an all-stock transaction valued at roughly $2 billion.
At the exchange ratio of 0.485 share of Twilio class A common stock per share of SendGrid common stock, this price equates to about $36.92 per share based on Oct. 15 closing prices, the company said Oct. 15. The transaction, which is expected to close in the first half of 2019, has been approved by the boards of both companies. The exchange ratio represents a 14% premium over the average exchange ratio for the 10 calendar days, ending Oct. 15.
Under the terms of the transaction, Twilio unit Twilio Merger Subsidiary Inc. will be merged with and into SendGrid, with SendGrid surviving as a wholly owned subsidiary of Twilio.
The closing of the deal is subject to the satisfaction of customary closing conditions, including shareholder approvals by each of SendGrid's and Twilio's respective stockholders and the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Certain stockholders of SendGrid owning about 6% of the outstanding SendGrid shares have entered into voting agreements and certain stockholders of Twilio who control roughly 33% of total Twilio voting power have entered into voting agreements, or proxies, pursuant to which they have agreed to vote in favor of the acquisition.
Goldman Sachs & Co. LLC is serving as exclusive financial adviser to Twilio and Goodwin Procter LLP is acting as legal counsel to Twilio. Morgan Stanley & Co. LLC is serving as exclusive financial adviser to SendGrid and Cooley LLP and Skadden Arps Slate Meagher & Flom LLP are acting as legal counsel to SendGrid.
Twilio provides a cloud communications platform that enables developers to build, scale, and operate communications within software apps.