Twitter Inc Acquires TellApart In All Stock Deal Worth $533 Mil

Twitter Inc Acquires TellApart In All Stock Deal Worth $533 Mil

Twitter made two major announcements on Tuesday – earnings for the first-quarter and its deal to acquire TellApart without disclosing the financial terms. On Wednesday, however, the micro-blogging firm disclosed that it is purchasing the marketing technology firm for $533 million in stock.

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A good fit for Twitter’s e-commerce plans

The new acquisition will help Twitter in making ‘direct-response’ advertising more effective. Such ads are very similar to tweets, and encourage users to do what is needed to view an ad-video or downloading the mobile app for a particular business. At the time of announcing the acquisition, Twitter said that the acquisition will provide it with “additional tools for cross-device identity, targeting and attribution, along with a talented team with deep direct response expertise.”

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Twitter has been making stringent efforts for broadening its reach in the e-commerce. A recent example of this was the ‘Buy’ button introduced by the company on an experimental basis. TellApart specializes in “cross device” techniques that have become more popular lately, and their technology helps to target customers shifting rapidly between desktops and mobile. The micro-blogging firm can utilize the services of the start-up to further advance its ecommerce efforts.

Twitter saves cash

By paying for the acquisition in stock, Twitter has saved its cash, which stood at around $3.6 billion at the end of March. The closing price for Twitter’s shares on Tuesday was $42.27, so the company will issue close to 12.6 million shares for the deal, making it one of its biggest acquisition to date, says a report from the Wall Street Journal. Another large acquisition by Twitter was MoPub, a mobile ad exchange, back in October 2013.

Of note, Twitter CEO Dick Costolo invested in TellApart back in 2010. Costolo along with Greylock Partners, LinkedIn founder Reid Hoffman and SV Angel participated in a $4.8 million funding round for TellApart. The start-up was founded by Google executive Josh McFarland in 2009, and it raised $13 million in a funding led by Bain Capital Ventures in 2011.

However, for the most recent quarter, revenue growth was below expectations for Twitter. Following the weak earnings report, the stock was down 18% on Tuesday and another 8.9% on Wednesday.

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