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Rosenblatt Upgrades Twilio After Segment Acquisition

October 13, 2020
Ryan Koontz
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Benzinga

Twilio Inc TWLO 2.42% announced Monday it has entered into a definitive agreement to acquire Segment for approximately $3.2 billion in a stock deal. The transaction is expected to close in the fourth quarter.

Segment has a strong customer data platform (CDP) and the acquisition positions Twilio as a leader in customer engagement, according to Rosenblatt.

The Twilio Analyst: Ryan Koontz upgraded Twilio from Neutral to Buy, raising the price target from $255 to $375.

The Twilio Thesis: The company should be able to sustain 30% growth going ahead, Koontz said.

“We applaud this move to accelerate TWLO efforts to vertically integrate into the platforms business which we believe will both elevate the strategic nature of customer engagement and make its product more sticky with reduced threat of churn," Koontz wrote in the note.

“We expect TWLO to leave Segment as an independent division due to its multi-vendor agnostic approach. Longer term, deeper integration between CDP and CPaaS can propel TWLO to a global leader in a newly classified market of digital customer engagement where several cloud heavyweights also aim to compete,” he added.

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