Email Marketing Monolith ‘Constant Contact’ Bought for $1.1 Billion
Endurance International Group Holdings Inc. announced on Nov. 2 that it would be acquiring the email marketing company Constant Contact Inc. for $1.1 billion.
Endurance provides web-hosting services to small- and medium-sized businesses, according to the Wall Street Journal, and it agreed to pay Constant Contact $32 per share (which was 23% higher than its $26.10 per share closing price on Friday).
According to Venture Beat, Endurance explained that it been discussing the possible acquisition since late 2014. Although the $1.1 billion sale was slightly higher than the company’s value, Endurance stated that it expects the combined revenue to grow by 10-12% next year once Constant Contact is acquired.
Endurance is hoping that the email services provided by Constant Contact will help the company offer better hosting services to small, independent businesses.
Constant Contact was founded in 1995 and has been a driving force behind the industry of email marketing, Beta Bostonstated.
Considering that email marketing is still one of the most cost-effective online marketing strategies (it yields about $44.25 for every $1 spent, on average), and considering that email usage on mobile devices has increased by 80% in just six months, it’s no surprise that a marketing company like Endurance would be interested in this industry.
Endurance, based in Burlington, MA, already owns over 40 smaller hosting companies in the U.S. and abroad, including BigRock, HostGator, and FatCow.com. It was born in 1997 and serves around 4.5 million small- and medium-sized businesses, according to Beta Boston.
Both Endurance and Constant Contact claim that at least 70% of their clients are businesses with fewer than 10 employees.
The acquisition of Constant Contact is expected to take place during the first quarter of 2016, pending shareholder and regulatory approvals.