Constant contact acquired for over one billion dollars

Mon, 2nd November 2015, 16:15

Endurance International Group (EIG) is on a buying spree again this time agreeing to acquire online marketer Constant Contact in a cash deal said to be worth around $1.1 billion. EIG has consolidated numerous well known web hosting brands such as HostGator, Bluehost, Site5 and Arvixe into its fold.

Constant Contact provides email-marketing services for small businesses but the combined companies will serve more than 5 million small businesses and nonprofits and have a combined revenue of more than $1 billion. Endurance said in the release that the acquisition of Constant Contact would expand the company's core business of small business marketing and web hosting to online marketing services.

Hari Ravichandran, president and chief executive officer of Endurance:

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. 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.

Gail Goodman, chief executive officer of Constant Contact:

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.

EIG will be paying $32 per Constant Contact share, a 23% premium over its closing price of $26.10 on Friday. The transaction is expected to close during the first quarter of 2016, pending shareholder and regulatory approvals.Following this deal and other recent purchases, Endurance said it sees adjusted revenue of about $1.1 billion in 2015 and that number growing 10% to 12% next year.

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