Intuit to buy online banking provider
Financial software giant Intuit Inc. will buy online banking provider Digital Insight in a $1.35-billion deal designed to strengthen offerings to small businesses.
The acquisition, announced Thursday, combines Intuit’s financial management software -- including TurboTax and Quicken -- with Calabasas-based Insight’s online banking services.
“Online banking is growing rapidly, but today’s solutions don’t meet the needs of most small businesses,” Digital Insight Chairman Jeffrey Stiefler said. “Digital Insight’s and Intuit’s combined assets ... will change the game for small businesses, consumers and the financial institutions that serve them.”
The all-cash purchase values Digital Insight at $39 a share, an 18% premium over the stock’s Wednesday close. It is the largest since Intuit bought TurboTax in 1994. The Mountain View, Calif., company hopes the acquisition will enable it to expand its services to regional and community banks that have as much as $30 billion in assets.
Nearly 1,800 credit unions and mid-size banks use Digital Insight to provide their customers with online banking access.
Intuit Chief Executive Steve Bennett said the two companies had been working together on an application for small businesses when they realized it made sense to combine. He is wagering about 12% of Intuit’s market value that the investment will pay dividends. Intuit said it planned to borrow about $1 billion to finance the deal, which is expected to close by March.
Virtually all of Digital Insight’s 800 employees are expected to join Intuit’s payroll of about 7,500.
Intuit shares closed down 37 cents to $31.52 but rose to $31.94 in after-hours trading. Digital Insight rose $5.15 to $38.15 in the regular session and added a penny in after-hours trading.
The Associated Press and Reuters were used in compiling this report.
