Cloud communications platform provider Twilio Inc. said on Monday it would buy customer data platform Segment for $3.2 billion in an all-stock deal.

Twilio's shares (TWLO) rose more than 2% to $314 in early trading.

The announcement of the deal, expected to close in the fourth quarter of Twilio's fiscal 2020, comes after the company estimated third-quarter sales above its previous forecast earlier this month.

Cloud companies have seen a surge in demand this year as more businesses use their services to meet the demands of the switch to work from home due to the COVID-19 pandemic.

Following the deal, Segment will become a part of Twilio.

Morgan Stanley & Co LLC was Twilio's financial adviser, while Cooley LLP was its legal adviser. Qatalyst Partners was Segment's financial adviser and Goodwin Procter LLP acted as its legal adviser.