Pathwire, an email services company that was once part of Rackspace, is being acquired by Swedish company Sinch AB in a $ 1.9 billion cash and stock deal.
It can one of the local tech industry’s largest deals since 2016, when Apollo Global Management bought Rackspace for $ 4.3 billion.
Sinch, a global cloud communications company, will pay the Sellers, a group that includes Chicago-based private equity firm Thoma Bravo, $ 925 million in cash and 51 million new Sinch shares.
The deal, announced last week, is slated to close by the end of the year, pending approval from the Federal Trade Commission and the Department of Justice. Pathwire partners with Sinch’s US subsidiary Pegasus Corp. One merge.
Pathwire provides an email platform for marketing communications and “transactional emails,” which are automated emails such as booking confirmations, receipts and password resets. According to a study by Technavio, a market research group cited by Sinch, these transactional emails make up most of the value of the growing $ 16 billion global market.
Pathwire will have total revenues of $ 132 million with gross profits of $ 104 million in 2021, according to a press release from Sinch. It employs around 290 people and is based in the Weston Center on East Pecan Street.
“Sinch and Pathwire are a natural fit,” said Will Conway, CEO of Pathwire, in a prepared statement. “I’m proud of what the Pathwire team has achieved and I’m excited about this next step in our journey and the many opportunities we can open up together.”
Pathwire has more than 100,000 customers, including Lyft and Microsoft, according to the publication. Its three main product groups – Mailgun, Mailjet and Email on Acid – aim to Help developers and marketers create email systems that reach targeted inboxes with custom displays.
“Each form of digital communication has its unique advantages, and delivering high quality on a large scale requires both extensive technical skills and in-depth technical knowledge,” said Oscar Werner, CEO of Sinch, in a prepared statement. “Together with Pathwire, we will be able to offer a best-of-breed product set for messaging, voice and email.”
Pathwire was founded as Mailgun Technologies in 2010, under the name it was known by until February of this year. Rackspace bought the company in 2012 and owned it for five years until Conway spun off the company. The company continued to grow with the help of private equity funds from groups like Scaleworks from San Antonio, Turn / River Capital from San Francisco and Thoma Bravo.
Sinch, based in Stockholm, has offices in over 30 countries.