UPDATE 1-Twilio to buy text messaging platform Zipwhip for $850 million

(Adds deal details, background)

May 17 (Reuters) - Cloud-communications firm Twilio Inc said on Monday it plans to buy toll-free messaging provider Zipwhip for about $850 million in cash and stock.

Zipwhip, which provides a platform for businesses to use their landline or toll-free numbers to send text messages to customers, will become part of Twilio’s messaging business unit once the deal closes.

The Zipwhip deal, expected to close by the end of 2021, follows Twilio’s announcement in March that it would invest up to $750 million in telecommunications services company Syniverse Technologies LLC.

The deal is expected to modestly add to Twilio’s gross margin and revenue, according to the company.

Morgan Stanley & Co LLC served as exclusive financial adviser and Cooley LLP acted as legal counsel to Zipwhip, while Fenwick & West LLP was Twilio’s legal counsel. (Reporting by Uday Sampath in Bengaluru; Editing by Shounak Dasgupta)