- Purchase to be paid for with $1.085 billion in debt financing
- Offer is 23 percent premium to Constant Contact Oct. 30 price
Endurance International Group Holdings Inc. agreed to buy software maker Constant Contact Inc. in a deal valued at $1.1 billion as the provider of Internet-based services broadens its reach into small business marketing.
Endurance will pay $32 in cash for each Constant Contact share, the companies said Monday in a joint statement. The offer represents a premium of about 23 percent over Constant Contact’s Oct. 30 closing price. Endurance shares slid as much as 23 percent after the announcement.
Constant Contact will remain a distinct brand with its suite of online tools such as e-mail marketing, events management and social-media integration, the companies said. The acquisition will drive up Endurance’s subscriber base to more than five million and result in fiscal 2015 revenue on a pro forma adjusted basis of $1.1 billion, according to the statement. Endurance said it expects to pay for the deal with $1.085 billion of debt financing.
“Their focus on the customer and product development complements our offerings for small business services,” Hari Ravichandran, Endurance’s president and chief executive officer, said in the statement.
Endurance, based in Burlington, Massachusetts, fell 17 percent to $11.12 at the close in New York, its biggest drop since the stock went public in October 2013. Constant Contact, in nearby Waltham, jumped 22 percent to $31.83, its largest gain since April 2014.
The deal is expected to close in the first quarter, the companies said. Goldman Sachs & Co. was lead financial adviser to Endurance while Morgan Stanley advised Constant Contact.