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Sinch to acquire email platform Pathwire for $1.9bn

David Murphy

Mobile customer engagement firm Sinch is buying cloud-based email delivery platform Pathwire, whose ESP brands include Mailgun, Mailjet and Email on Acid. Pathwire will be acquired through a merger between a subsidiary of Sinch, Pegasus Corp One, which is registered in Delaware.

The acquisition will be financed through a combination of cash, equity and debt facilities. Sinch will pay the sellers a cash consideration of $925m (£688m) and 51m new shares in Sinch. Using yesterday’s closing Sinch share price of SEK165.9 ($18.8) and USD/SEK exchange rate of 8.8, this corresponds to an enterprise value of approximately $1.9bn.

Pathwire provides an email deliverability platform for transactional and marketing email. Over 100,000 businesses use Pathwire’s products to engage with their customers, including Lyft, Kajabi, Microsoft, Iterable, and DHL.

Sinch said its acquisition of Pathwire makes it one of the very few, global CPaaS providers that can deliver leading quality at scale across all the main digital communications channels.

“Every form of digital communications has its unique benefits, and delivering high quality at scale requires both extensive technical capabilities and deep subject matter expertise,” said Sinch CEO, Oscar Werner. “Together with Pathwire, we will be able to offer a best-of-breed product set, across messaging, voice and email, that empowers businesses and developers to craft an unmatched, digital, customer experience.”

In the 12 months ending 31 December, 2021, Pathwire is expected to record revenues of $132m, Gross Profit of $104m, and Adjusted EBITDA of $55m. The business employs around 290 people and is headquartered in San Antonio, Texas.