Takeovers and Buyouts
The latest deal news from across the alternative investment space.
According to ProPublica, a non-profit newsroom that investigates abuse of power, the US Justice Department will investigate Intuit Inc (NASDAQ: INTU)’s $7.1 billion acquisition of Credit Karma announced in February. Intuit is an American business and financial software company that develops and sells financial, accounting, and tax preparation software. It has a market capitalization of $81 billion. Credit Karma is a fintech that launched a free tax return service that became a formidable rival to Intuit.
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More Stories on Takeovers and Buyouts
In late 2019, Credit Sesame and Canadian challenger bank STACK joined hands to offer Sesame Cash, a checking account service that put users in control of their banking and credit in one place. Since mid-May, when Sesame Cash became available to the general public, more than 200,000 customers signed up in less than a month. Over 62% of Credit Sesame’s 15 million members are interested in the Sesame Cash service. Credit Sesame announced Tuesday its acquisition of STACK.
A Bloomberg report says Western Union has made a takeover offer for MoneyGram.
If the transaction succeeds, the two biggest players in the money transfer business in the US would combine. However, the matter is not yet officially public, and Bloomberg quoted a person who asked not to be identified.
Apollo Global Management (NYSE: APO) announced certain affiliate-led funds drove the purchase of $1.75 billion of convertible preferred stock in Albertsons Companies. The target is one of the largest food and drug retailers in the United States. The investment will represent approximately 17.5% pro forma equity ownership of Albertsons on an as-converted basis.
The Wall Street Journal revealed Tuesday that Uber (NYSE: UBER) is pursuing a takeover of food delivery service Grubhub (NYSE: GRUB) in an all-stock deal. In fact, talks started earlier this year, and according to Bloomberg, the deal could be consummated as early as this month. If successful, Uber’s play for Grubhub would be a gamechanger for the food delivery sector.
Nikolay Storonsky, chief executive of British challenger bank and fintech unicorn Revolut, says his company has “a real opportunity” to benefit from the pandemic. Speaking to the Financial Times, he revealed plans to use his cash hoard to buy corona-strapped, tech rivals.
It’s the third big one in the fintech space within a space of barely four months. In January, Visa (NYSE: V) acquired Plaid for $5.3 billion, followed by Intuit (NASDAQ: INTU) paying $7.1 billion for Credit Karma in February. In the current deal, personal finance company SoFi is buying up Galileo, a Utah-based financial services API and payments platform, for $1.2 billion in cash and stock. Accel, an investor in Galileo, has reportedly romped home with 4X returns.
Ziptel Ltd (ASX: ZIP), an Australian owned and operated telecommunications business that provides international roaming and calling solutions, is changing its business model. It is acquiring the entire share capital of Douugh Ltd, a fintech that helps people achieve financial wellness. On completion of the acquisition, ZipTel’s name would change to ASX: DOU. In this new avatar, ZipTel would become a financial software and services company.
Salesforce snaps up CRM startup Vlocity for $1.33B. Vlocity builds CRM systems that are industry-specific, cloud and mobile-based. Vlocity’s industry solutions are communications, media and entertainment, insurance and financial services, health, energy and utilities, and government and nonprofits.
The tables have turned. There was a time when banks sought to acquire fintechs for their technology and customer reach. But the acquisition of Radius Bancorp by LendingClub (NYSE: LC) is the first case of a fintech, the largest of its kind in the country and listed, buying into a bank. And the acquisition makes eminent business sense. It could, therefore, set off a new trend in such deals.
Franklin Templeton will become a $1.5 trillion behemoth after its acquisition, announced Tuesday, of rival Legg Mason for $6.5 billion including debt. It will pay $50 per share of Legg Mason in cash – a premium of $10 over the latter’s Monday closing price. In addition, it will assume $2 billion of the latter’s debt.
BitGo, the leader in crypto custody services, acquires Harbor, the top name in digital securities. It’s a diversification move aimed at a role in the entire transaction chain of digital assets. In the deal, BitGo gets Harbor’s digital securities platform, as well as its broker-dealer and transfer agent subsidiaries. Financial terms of the transaction are not known.
Personal lending platform LendingClub has agreed to acquire FDIC-regulated, Boston-based online bank Radius Bancorp in a cash (75%)-cum-stock (25%) deal worth $185 million. This is the first time that a US fintech has bought up a bank.
Sycamore Partners is considering a deal to purchase Victoria’s Secret from L Brands (NYSE: LB). CNBC reported a possible deal Sunday while citing sources close to the matter. Sycamore manages roughly $10 billion in assets and has specialized in brick-and-mortar deals. It has previously worked on deals involving Talbots, Nine West, and Staples.
Black Dragon Capital, a private equity firm, has agreed to acquire all of Grass Valley from Belden Inc. (NYSE: BDC), reports TVTechnology. According to a statement, Black Dragon intends to take Grass Valley to the next level with a cloud-enabled, software-based business model. It intends to develop Grass Valley into a market leader in digital media and open and inclusive cloud technology.
With new-fangled fintech disruptors snapping at their heels, two legacy payment processor giants in Europe have joined forces in an $8.6 billion mega-deal. French payment company Worldline will acquire domestic rival Ingenico to create the industry’s number four player.
CITIC Capital, the Chinese private equity firm, is bidding for a 22% stake in the Chinese and Hong Kong businesses of McDonald’s Corp. The firm is looking to put some of the $2.8 billion that it raised for its fourth Chinese buyout fund in August 2019.
There are too many fintechs out there, but many can’t survive on their own.
A Barron’s analysis of likely deal-making in the fintech sector after the landmark Visa-Plaid deal shows a mixed picture.
Voya Financial may become a possible takeover target in the coming months, according to the Financial Times. The report indicates that the former ING Group insurance unit and retirement plan provider has explored a possible sale. Voya reportedly spoke with AIG, Principal Financial Group, and Prudential Financial in 2019 about a deal.
New York advisory Aksia will purchase private equity consultancy TorreyCove Capital Partners. The deal will see the two firms marry under the name Aksia. Aksia has specialized in private credit and hedge fund strategies. TorreyCove has specialized in private equity and real asset strategies.
Visa Snaps Up Fintech Network Plaid for $5.3 Billion. Plaid allows people to connect their finances to apps.
Fintech applications need to connect up with a user’s financial accounts to deliver true benefits of immediate updation and convenience.
Venture Capital and private equity firm Insight Partners said Monday that it would acquire Israeli cybersecurity startup Armis at a valuation of $1.1 billion, said The Jerusalem Post.
Though Insight did not disclose the sale price, it will pay it in cash. Alphabet’s private equity arm, CapitalG, will participate for $100 million, while certain existing stockholders will rollover holdings.
The transaction is the biggest acquisition so far of an Israeli cybersecurity firm.
Broadcast M&A picked up last quarter. According to media research firm Kagan, broadcast station M&A hit $900.0 million in Q4 2019.
The deal creates a new firm with $21 billion in assets. Bancorp South Bank announced the completion of its acquisition of Texas First Bancshares, the parent company of Texas First State Bank. Following the deal, Bancorp South now has $21 billion in assets. It operates approximately 310 full-service branch locations as well as additional mortgage,…
Key trends in global M&A during 2019 included a sharp rise in large M&A transactions accompanied by a slowdown in cross-border deals. Deal-makers were defensive given geopolitical tensions such as trade disputes. As a result, they focused more on deals in their home turf.
Aggregate transactions worldwide totaled $3.9 trillion in 2019, the fourth strongest year for M&A deal-making, according to data from Refinitiv as reported by Reuters. It was also the sixth year on the trot that transactions totaled more than $3 trillion.