Endurance International Group Holdings Inc., which sells a range of Internet hosting and website products, announced Monday that it’s spending about $1.1 billion to buy e-mail marketing provider Constant Contact Inc.
The purchase price is 23 percent higher than Waltham-based Constant Contact’s closing stock price of $26.10 on Oct. 30. The two companies said their boards of directors had already approved the deal.
Burlington-based Endurance International said it expects to pay for the acquisition with borrowed money, which will be paid in cash to Constant Contact shareholders.
It’s a significant amount of debt for Endurance International, which has a market capitalization of about $1.8 billion. Endurance had sales of about $652 million last year, compared with Constant Contact’s revenue of about $332 million.
Endurance’s shares were trading about 19 percent lower at midday, while Constant Contact shares jumped more than 22 percent.
Constant Contact’s employees will join Endurance International, and its services will join the parent company’s long list of separately marketed products, which include website hosting service HostGator and blogging software Typepad.
“Constant Contact will continue to operate as its own distinct brand,” Endurance International chief executive Hari Ravichandran said.
“We’ll become their largest business instantly,” Constant Contact chief executive Gail Goodman said. “We’re looking to create a small business powerhouse — take businesses from their moment of inception into growth, marketing, advertising, and success.”
The transaction should bring “at least $25 million” in savings during the company’s next fiscal year, Ravichandran said.
Goodman said there would be “some cuts, but not dramatic” changes as a result of the deal, with notable savings in marketing and administration. Constant Contact will stay in its Waltham headquarters, she said.
Endurance International has about 2,500 employees, while Constant Contact has about 1,400.
The two companies were business partners before the acquisition. Endurance International is responsible for about 5 percent of Constant Contact’s new customers under a marketing deal that began earlier this year, the companies said.
By combining, Endurance International and Constant Contact could bolster their competitive position in an online marketing sector that has seen renewed interest from startup entrepreneurs and large tech companies in recent years.
One key example in the Boston area is HubSpot, a Cambridge-based online marketing company that went public in 2014. HubSpot offers several services that compete with both Endurance and Constant Contact, including website building tools and e-mail marketing software.
Goodman said she plans to stay on board for up to a year as the companies combine their operations, but will likely step down once the merger is complete.
“I’m going to help settle the team and then see what’s next,” Goodman said. “I’ve had a very good run.”