Intuit To Acquire Credit Karma For Roughly $7.1B In Cash And Stock

Intuit announced that it has agreed to acquire Credit Karma, the consumer technology platform with more than 100 million members in the U.S., Canada and U.K., for approximately $7.1 billion in cash and stock.

By agreeing to acquire Credit Karma, a company with nearly $1 billion in unaudited revenue in calendar year 2019, up 20% from the previous year, Intuit accelerates its mission of powering prosperity around the world, it said. The transaction is expected to be neutral to accretive to Intuit's non-GAAP earnings per share in the first full fiscal year after the transaction closes. Intuit has agreed to pay total consideration of approximately $7.1 billion to acquire Credit Karma, subject to customary adjustments for transactions of this nature. The purchase price for Credit Karma will be payable in equal portions of cash and Intuit common stock, with the shares of Intuit common stock being valued at approximately $299.73 per share (which price was calculated based on the daily volume-weighted average sales price per share for Intuit common stock for the ten trading days ending on February 21, 2020). The per share price of these shares has been fixed as of the merger agreement signing date. The aggregate value of these shares will fluctuate based on changes in our share price between the signing date and the closing date. The total consideration of $7.1 billion includes an estimated $1 billion of equity awards that will be expensed over up to three years.

Following the close of the transaction, Intuit will issue approximately $300 million of restricted stock units to Credit Karma employees, which will be expensed over four years. Intuit expects the cash consideration to be financed through cash and its existing unsecured line of credit. The transaction is not expected to have an impact on Intuit's existing dividend and share repurchase principles. The transaction is expected to close in the second half of the calendar year 2020, subject to receipt of required regulatory approvals and satisfaction or waiver of other customary closing conditions.
 

Disclosure: None.

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.