Software solutions provider Atlassian (NASDAQ:TEAM) is acquiring video messaging platform Loom for nearly $975 million.
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Founded in 2016, Loom’s platform offers transcripts in over 50 languages alongside video summaries and the ability to simultaneously record screens for users. The platform has over 25 million users and more than 200,000 customers.
Loom’s business users record nearly five million videos a month, and its addition could help Atlassian deliver a better collaboration experience for teams. Additionally, by bringing together AI solutions from the two companies, Atlassian could deliver seamless workflow transition to its users.
The $975 million deal includes a cash consideration of $880 million, with the rest in the form of TEAM equity. Atlassian plans to fund the deal via its existing cash balance and expects the deal to close in the third quarter of Fiscal Year 2024. The transaction is expected to be slightly dilutive to Atlassian’s operating margins in Fiscal Years 2024 and 2025.
Will TEAM Stock Go Up?
Overall, the Street has a Moderate Buy consensus rating on Atlassian. The average TEAM price target of $215.47 implies 8% potential upside. That’s on top of a nearly 58% rise in the stock over the past year.
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