Intuit's planned purchase of Mailchimp will give the combined company greater heft in the small business market, Wall Street analysts say. Intuit stock rose on the acquisition news Tuesday.

Mountain View, Calif.-based Intuit announced late Monday that it plans to buy Mailchimp in a cash-and-stock deal worth $12 billion. Atlanta-based Mailchimp provides a customer engagement and marketing platform for growing small and midmarket businesses.

Financial software firm Intuit is known for its products TurboTax, QuickBooks, Mint and Credit Karma. The Mailchimp acquisition is its largest ever.

The companies expect the deal to close in Intuit's fiscal second quarter, which ends Jan. 31.

Intuit Stock Rises On Acquisition News

On the stock market today, Intuit stock climbed 2% to close at 568.27. Intuit stock notched a record high of 582.96 on Aug. 25.

IBD MarketSmith charts show Intuit stock in a three-weeks-tight pattern.

"Together, Mailchimp and QuickBooks will help solve small and midmarket businesses' biggest barriers to growth, getting and retaining customers," Intuit Chief Executive Sasan Goodarzi said in a news release.

He added, "Adding Mailchimp furthers our vision to provide an end-to-end customer growth platform to help our customers grow and run their businesses, putting the power of data in their hands to thrive."

Founded in 2001, Mailchimp began by offering email marketing solutions. It has evolved into a leader in customer engagement and marketing automation software. It has 2.4 million monthly active users and 800,000 paid customers. Half of its customers are outside the U.S. It generated $800 million in revenue in 2020, up 20% from the prior year.

Deal Gets Thumbs Up On Wall Street

"Overall, we like this deal," Jefferies analyst Brent Thill said in a note to clients. "Mailchimp instantly brings a scaled presence in the front office with a broad product portfolio and $800 million+ in mostly recurring revenue. The deal helps realize Intuit's vision of becoming a complete platform for SMBs (small and midsize businesses), spanning both front and back office."

Thill reiterated his buy rating on Intuit stock with a price target of 640.

Mizuho Securities analyst Siti Panigrahi called the acquisition a "very strategic action." He rates Intuit stock as buy with a price target of 640.

Intuit stock is in the IBD Long-Term Leaders Portfolio.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.