Software giant Intuit (NASDAQ: INTU) recently announced an agreement to purchase the Mailchimp email marketing platform. This comes shortly after the significant acquisition of Credit Karma by Intuit. In this fool live Video clip, recorded September 30, Fool contributors Toby Bordelon and Matt Frankel discuss the acquisition and the likelihood that the company will be done with big buys for a while.
Toby Bordelon: The big news from Intuit is that Intuit is buying a company called Mailchimp. You may have heard of Mailchimp. It is a marketing service and an email marketing platform. They really focus on small businesses, they help businesses build a website, open an online store, make online appointments, that sort of thing. For their marketing, they do email marketing, digital advertising, social media marketing tools. They also offer business and data analytics, such as surveys, providing access to recommendations on any marketing campaigns you might want to run.
The deal aims to bolster Intel’s offerings for small businesses. It’s really meant to complement QuickBooks as the financial accounting platform they have for small businesses. I wanted to accelerate two of their big strategic bats in their strategic plan, which is the center of small business growth and disrupts the small business middle market.
If you see this slide here from their investor presentation on Acquisitions, you can see how they put Mailchimp and QuickBooks side by side, showing how these two together will create a more cohesive overall platform for marketing and managing. the customer relationship. that Mailchimp will offer compared to the accounting and finance and HR and payments platform that you can get from QuickBooks. That’s really what they’re trying to do, create a more robust platform for small businesses. They made acquisitions.
They also recently acquired Credit Karma, which is more consumer-oriented. Credit Karma is a personal finance app and platform. So there are two things going on here very recently, Credit Karma is reinforcing this personal stuff, the consumer stuff, Mailchimp with a small business. They change jobs. It’s not the old Intuit that owned Quicken and doesn’t and really wasn’t for TurboTax anymore, they are expanding beyond that, becoming a more complete operation.
In some ways I dunno, it almost seems like they’re gearing up to be a competitor to Shopify in some ways. Very different businesses, but they are certainly part of the online tools of small business and customer and financial management. I think I like what they are doing here.
Matt Frankel: These are two fairly important acquisitions. I think Credit Karma was the bigger of the two if I’m correct in dollar terms. Are they strapped for cash? Do you see Intuit continuing to make targeted acquisitions like this or do you think it’s all about putting the brakes on and letting things unfold as they are now?
Bordeaux: I don’t think they’re necessarily short of money. That’s a market capitalization of over $ 100 billion. Mailchimp is a roughly $ 12 billion deal. They finance part of it with debt. It is, I think, $ 4.5 billion to $ 5 billion that they are going into debt. They can handle this, but to your question, do you think they go shopping? I think they will continue to make acquisitions, but I really hope they take a break from big acquisitions, especially when it may require funding.
Credit Karma is not even fully integrated, it is still very recent. It’s a big company, but I think they need to take stock of what they have, make sure it all works well together, that’s the vision that plays out before they tackle any other big ones. case. It’s not enough to just make an acquisition, you have to make that acquisition work. I want to see them do this with Mailchimp and Credit Karma before they get fat again.
This article represents the opinion of the author, who may disagree with the âofficialâ recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.