Blackbaud Inc. plans to buy Convio Inc., an Austin, Texas, maker of online fundraising software for nonprofits, in a deal that values Convio at about $275 million.

The Daniel Island company announced the agreement before the stock market opened Tuesday. It will pay $16 a share in cash, a premium of 49% over Convio’s recent closing price, according to the announcement. The $275 million figure is Convio’s enterprise value based on fully diluted shares.

Both companies’ boards approved the deal unanimously, Blackbaud said. Blackbaud plans to buy the shares through a tender offer followed by a merger and expects to close in the first quarter.

To complete the tender offer, Blackbaud needs at least a majority of Convio’s shares on a fully diluted basis, and the waiting period under federal antitrust law must expire. All of Convio’s directors and officers and certain of its affiliates, who together hold more than 30% of Convio’s shares, have agreed to tender their stock, the company said.

What Convio does

Convio sells software that nonprofits use over the internet to raise money, run advocacy campaigns and manage relationships with donors, activists, volunteers and event participants. Its two main products are Convio Common Ground CRM for small and midsize nonprofits and Convio Luminate for large ones.

It has more than 1,500 customers in the United States, Canada and the United Kingdom, including 29 of the 50 largest U.S. charities, according to the announcement. In 2010, its U.S. clients used its tools to raise more than $1.3 billion online and send more than 4 billion emails.

Convio was incorporated in Delaware in October 1999 and went public in April 2010. It reported revenue of $69.7 million for 2010 and had 367 employees at the end of that year, according to its annual report. Its headquarters is at 11501 Domain Drive in Austin.

Why Blackbaud wants it

Blackbaud’s growth in online fundraising has come mainly from midsize nonprofits, while Convio’s strength is with large organizations and advocacy groups, CEO Marc Chardon told investors on a conference call Tuesday, according to a script of his remarks Blackbaud filed with federal securities regulators.

“We fully expect that Convio’s best-in-class, SaaS-based capabilities for large events, advocacy and federated organizations will enable Blackbaud to offer the industry’s most diverse and flexible set of online capabilities on a global basis,” Chardon said in the announcement. SaaS stands for software as a service.

Chardon said combining the two would create “one of the largest SaaS vendors with over $440 million in trailing twelve months pro forma revenue.” On the call, he said Blackbaud now sees $500 million in annual revenue as “well within our sights” and has a longer-term goal of $1 billion or more.

Convio President and CEO Gene Austin said customers had long asked the two companies to connect their products.

“We expect the combination of Convio and Blackbaud to provide large nonprofit organizations with the best of both worlds, the industry’s strongest online fundraising solution along with market leading CRM capabilities,” Austin said in the announcement. He will take a leadership role at Blackbaud after the deal closes, reporting to Chardon.

Paying for it

Blackbaud will pay with cash on hand, an expanded and extended version of its current credit facility and new syndicated debt. JPMorgan Chase Bank, SunTrust Bank and BofA Merrill Lynch are providing the financing.

After the deal, Blackbaud expects net debt of about $240 million, about 2.5 times the combined company’s adjusted earnings before interest, taxes, depreciation and amortization over the 12 months that ended Sept. 30.

Blackbaud expects the purchase to add to its non-GAAP earnings per share in 2012, and more so in later years.

“We are very confident in the company’s ability to service its new debt balance due to our free cash flow being much greater than our expected cash interest expense, in addition to the fact that we expect further enhancements of our cash flow following the acquisition and integration of Convio,” Tony Boor, Blackbaud’s senior vice president and chief financial officer, said in the announcement.

On a pro forma basis for the 12 months that ended Sept. 30, the two companies together had $440 million in revenue, $94.9 million in adjusted EBITDA and $66.5 million in free cash flow, Blackbaud said.

BofA Merrill Lynch is Blackbaud’s financial adviser, and Stifel, Nicolaus & Co. is advising Convio.

The buyer

Blackbaud works with more than 25,000 customers in more than 60 countries, according to the announcement. It had 2,065 employees at the end of 2010, its annual report shows.

Blackbaud bought another publicly traded online fundraising company, San Diego’s Kintera, in 2008 for $1.12 a share in cash.