Business is about risks. Some calculated risks like the about-to-happen $3.2 Billion acquisition set apart great companies and leaders like Twilio and its CEO, Jeff Lawson respectively. It is important to note that this is the second acquisition coming up in a span of just two years. With such moves, it is clear the company is making serious money moves. Acquisitions are strategic decisions to fight competition and neutralize opponents at the same time.
According to reports shared with Forbes, the cloud communications company is set to finalize a $3.2 Billion acquisition sooner than later. The speed of execution matters in such deals. If you delay by a minute, you risk jeopardizing the deal. The Twilio CEO looks confident about the way things are going, and it seems the deal will be sealed shortly.
While other businesses suffered major losses courtesy of the Covid-19 pandemic, most tech companies gained massively. Twilio was also a beneficiary and continues to boom. This acquisition means strengthening its operations and expanding its market base.
The company being acquired is a data infrastructure company. The $3.2 Billion will be anchored on the Twilio stock. Attempts to reach out to Segment (the company to be acquired) have been futile. Apparently, the company’s chief executive in question turned down requests to talk about the possible acquisition.
Facts about these two companies will amaze you. The acquiring company made its Initial Public Offering (IPO) back in 2016. Currently, the company is valued at $45 Billion and continues to grow in worth with time. On the other hand, the Segment has been impressive and growing in worth. Twilio wants to acquire the company at a staggering $3.2 Billion, showing how valuable the company established in 2012.
In the latest release of the top 100 Cloud companies, Segment managed an impressive position 26. This is another indicator of how much value and potential the organization possesses. In early 2019, the Segment was valued at around $1.5 Billion. This is to say the company has grown three-fold in value over a period of just 18 months.
During the same time, Segment did a Series D fundraiser and collected about $175 Million. The event was led by two influential individuals and investors named GV and Accel. Well, these two individuals, too, have been approached to shed more light on the apparent acquisition. Unfortunately, it seemed both didn’t want to comment on the matter. Each of them excused themselves from commenting on the matter.
The decision not to comment on the matter from those on the Segment side leaves more questions than answers on whether this alleged acquisition will come to pass.
The Twilio Bait
According to Alex Konrad on Forbes.com, Twilio saw SendGrid’s worth go up within months of finalizing its acquisition. Besides, the tech giant tech company seems to thrive on public markets. This is evident in their apparent rise in share value by close to 146% in the recent valuations. This could be the bait Twilio could use to seal the Segment deal. Perhaps the Segment management would sign up to the deal with the hope of value addition just like SendGrid experienced in the 2019 acquisition.
Stock markets can sometimes be challenging. But, when you find a winner like Twilio, one need not think twice. An acquisition will always work to the advantage of the acquired just like it did with SendGrid in 2019. Time will tell whether this acquisition will come to life. Besides, only then will we see if the hopes of Segment management of a rise in valuation will come true.
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