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Intuit (INTU) to Buy Digital Marketing Firm Mailchimp for $12B
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Intuit (INTU - Free Report) , on Monday, announced entering into an agreement to acquire the privately-held digital marketing company, Mailchimp, in a cash-and-stock deal worth $12 billion. The company expects to complete the transaction by the end of second-quarter fiscal 2022.
The total consideration includes $300 million of Mailchimp employee transaction bonuses to be paid in the form of restricted stocks. Intuit intends to fund the acquisition through its available cash on hand and new debt of $4.5-$5 billion.
The transaction marks the tax and accounting software giant’s biggest ever acquisition. Last year, the company had acquired personal finance portal, Credit Karma, for $7.1 billion.
Buyout to Boost Intuit’s Small-Business Capabilities
Founded in 2001, Atlanta-based Mailchimp provides e-mail marketing services to small businesses. With its powerful and cutting-edge artificial intelligence (AI)-driven technology stack, this privately-held firm has evolved as a global leader in providing customer engagement and marketing automation solutions.
Therefore, the acquisition of Mailchimp is likely to enhance the tax and accounting software giant’s capabilities in providing business services to small-and mid-market companies. The acquisition will help the TurboTax software maker add insights to its Quickbooks platform that tracks spending. With this integration, Intuit will be able to provide an end-to-end customer growth platform to its clients and help them figure out how to better target their customers.
“Together, Mailchimp and QuickBooks will help solve small- and mid-market businesses’ biggest barriers to growth, getting and retaining customers," said Sasan Goodarzi, CEO of Intuit. He further added, "Adding Mailchimp furthers our vision to provide an end-to-end customer growth platform to help our customers grow and run their businesses, putting the power of data in their hands to thrive."
Buyout to Enhance Intuit’s Customer Reach
The acquisition of Mailchimp is anticipated to enhance Intuit’s global presence. Mailchimp currently caters to more than 13 million users globally, of which 2.4 million are active users. It has around 800,000 paid customers, of which more than 50% are outside the United States.
Mailchimp has a huge database of more than 70 billion contacts as well as technology integration with more than 250 partners worldwide. This massive contact database and partner-technology integration will allow Intuit in cross selling its other products.
The transaction is anticipated to be accretive to Intuit’s fiscal 2022 adjusted earnings.
Expansion of QuickBooks Platform to Drive Growth
The continued addition of new features and integration of new tech solutions to the QuickBooks platform is driving Intuit’s Small Business and Self-Employed Group segment revenues. The division registered 19% year-over-year sales growth in fourth-quarter fiscal 2021 and reached $1.25 billion.
Last month, Intuit’s newly-acquired Credit Karma business unit announced integrating its Credit Karma Money program with QuickBooks’ online payroll service.
Last November, Intuit launched HubSpot for QuickBooks, which adds enhancements to the QuickBooks platform by providing integrated CRM solutions to provide small businesses with better financial management solutions.
Further, it has introduced new capabilities to the platform, such as the QuickBooks Insurance and 401 (k) powered by Guideline, and launched an omnichannel sales platform, QuickBooks Commerce.
The company has also integrated with Amazon’s (AMZN - Free Report) Amazon Business, to import all Amazon Business purchases to QuickBooks automatically. Further, it extended its partnership with Bill.com Holdings (BILL - Free Report) to add advanced bill-payment and workflow-automation solutions for the QuickBooks Online Advanced customers.
Moreover, the formation of a new AI-driven consumer finance platform post Credit Karma’s acquisition will fuel growth for Intuit’s robust product portfolio, which includes TurboTax, QuickBooks and Mint.
Conclusion
Although Intuit’s initiatives to enhance its capabilities in providing business services to small-and mid-market companies are commendable, the company’s near-term prospect looks gloomy as the global lockdown amid the coronavirus crisis has affected small businesses, posing risks to its revenue growth. Small businesses are pushing back their payroll-related investments due to the pandemic-induced global economic and business uncertainty.
Additionally, higher costs and expenses due to increased investments in the company’s marketing and engineering teams are expected to continue hurting its bottom line in the near term.
Intuit currently carries a Zacks Rank #5 (Strong Sell).
A better-ranked stock in the broader technology sector is NVIDIA (NVDA - Free Report) , which currently carries a Zacks Rank #2 (Buy). The long-term earnings growth rate for NVIDIA is currently pegged at 17.7%.
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Intuit (INTU) to Buy Digital Marketing Firm Mailchimp for $12B
Intuit (INTU - Free Report) , on Monday, announced entering into an agreement to acquire the privately-held digital marketing company, Mailchimp, in a cash-and-stock deal worth $12 billion. The company expects to complete the transaction by the end of second-quarter fiscal 2022.
The total consideration includes $300 million of Mailchimp employee transaction bonuses to be paid in the form of restricted stocks. Intuit intends to fund the acquisition through its available cash on hand and new debt of $4.5-$5 billion.
The transaction marks the tax and accounting software giant’s biggest ever acquisition. Last year, the company had acquired personal finance portal, Credit Karma, for $7.1 billion.
Intuit Inc. Price and Consensus
Intuit Inc. price-consensus-chart | Intuit Inc. Quote
Buyout to Boost Intuit’s Small-Business Capabilities
Founded in 2001, Atlanta-based Mailchimp provides e-mail marketing services to small businesses. With its powerful and cutting-edge artificial intelligence (AI)-driven technology stack, this privately-held firm has evolved as a global leader in providing customer engagement and marketing automation solutions.
Therefore, the acquisition of Mailchimp is likely to enhance the tax and accounting software giant’s capabilities in providing business services to small-and mid-market companies. The acquisition will help the TurboTax software maker add insights to its Quickbooks platform that tracks spending. With this integration, Intuit will be able to provide an end-to-end customer growth platform to its clients and help them figure out how to better target their customers.
“Together, Mailchimp and QuickBooks will help solve small- and mid-market businesses’ biggest barriers to growth, getting and retaining customers," said Sasan Goodarzi, CEO of Intuit. He further added, "Adding Mailchimp furthers our vision to provide an end-to-end customer growth platform to help our customers grow and run their businesses, putting the power of data in their hands to thrive."
Buyout to Enhance Intuit’s Customer Reach
The acquisition of Mailchimp is anticipated to enhance Intuit’s global presence. Mailchimp currently caters to more than 13 million users globally, of which 2.4 million are active users. It has around 800,000 paid customers, of which more than 50% are outside the United States.
Mailchimp has a huge database of more than 70 billion contacts as well as technology integration with more than 250 partners worldwide. This massive contact database and partner-technology integration will allow Intuit in cross selling its other products.
The transaction is anticipated to be accretive to Intuit’s fiscal 2022 adjusted earnings.
Expansion of QuickBooks Platform to Drive Growth
The continued addition of new features and integration of new tech solutions to the QuickBooks platform is driving Intuit’s Small Business and Self-Employed Group segment revenues. The division registered 19% year-over-year sales growth in fourth-quarter fiscal 2021 and reached $1.25 billion.
Last month, Intuit’s newly-acquired Credit Karma business unit announced integrating its Credit Karma Money program with QuickBooks’ online payroll service.
Last November, Intuit launched HubSpot for QuickBooks, which adds enhancements to the QuickBooks platform by providing integrated CRM solutions to provide small businesses with better financial management solutions.
Further, it has introduced new capabilities to the platform, such as the QuickBooks Insurance and 401 (k) powered by Guideline, and launched an omnichannel sales platform, QuickBooks Commerce.
The company has also integrated with Amazon’s (AMZN - Free Report) Amazon Business, to import all Amazon Business purchases to QuickBooks automatically. Further, it extended its partnership with Bill.com Holdings (BILL - Free Report) to add advanced bill-payment and workflow-automation solutions for the QuickBooks Online Advanced customers.
Moreover, the formation of a new AI-driven consumer finance platform post Credit Karma’s acquisition will fuel growth for Intuit’s robust product portfolio, which includes TurboTax, QuickBooks and Mint.
Conclusion
Although Intuit’s initiatives to enhance its capabilities in providing business services to small-and mid-market companies are commendable, the company’s near-term prospect looks gloomy as the global lockdown amid the coronavirus crisis has affected small businesses, posing risks to its revenue growth. Small businesses are pushing back their payroll-related investments due to the pandemic-induced global economic and business uncertainty.
Additionally, higher costs and expenses due to increased investments in the company’s marketing and engineering teams are expected to continue hurting its bottom line in the near term.
Intuit currently carries a Zacks Rank #5 (Strong Sell).
A better-ranked stock in the broader technology sector is NVIDIA (NVDA - Free Report) , which currently carries a Zacks Rank #2 (Buy). The long-term earnings growth rate for NVIDIA is currently pegged at 17.7%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.