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Intuit Expected To Announce $7B Acquisition Of Credit Karma

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Intuit Expected To Announce $7B Acquisition Of Credit Karma

Financial software maker Intuit Inc.'s (NASDAQ: INTU) deal to acquire personal finance company Credit Karma is almost final, and could be announced as soon as Monday, the Wall Street Journal reported.

What Happened

The deal, if finalized, would be the biggest for Intuit in its 37-year long history, the Journal noted, and also help it expand in consumer finance.

Credit Karma was last valued at $4 billion during a private sale two years ago, and the new deal values it significantly higher at $7 billion, according to the Journal.

The San Francisco-based company, which provides free credit scores for its customers, was founded by Kenneth Lin, Ryan Graciano, and Nichole Mustard in 2007, based on Lin's personal struggle of not being able to obtain his credit score.

Credit Karma also offers its customers suggestions on improving their credit scores and makes money through commissions when they buy its recommended online loans or credit cards.

Why It Matters

The financial services company was previously said to be considering going public around a similar time.

Credit Karma's decision to consider merger over an initial public offering follows the failure of a number of high-profile IPOs, including that of ride-sharing company Uber Technologies Inc. (NYSE: UBER) and SoftBank Group Corporation-backed (OTC: SFTBY) co-working space startup WeWork.

Earlier in January, fintech startup Plaid, which provides the intermediary technology between banks and payment services company, was acquired by Visa Inc. (NYSE: V) for $5.3 billion.

Another financial services company E*Trade Financial Corp (NASDAQ: ETFC) was acquired by banking behemoth Morgan Stanley (NYSE: MS) for $13 billion last week.

Price Action

Intuit's shares closed 1.22% lower at $297.57 in the regular session on Friday. The stock inched slightly higher at $298 per share in the after-hours session.

 

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