Financial and accounting software provider Intuit Inc is set to acquire personal finance company Credit Karma in a deal estimated to be worth over $7.1 billion. Intuit confirmed previous reports of the acquistion on Monday, stating that it has reached an agreement with Credit Karma.
The acquisition will be the largest purchase Intuit has ever made since it was established 37 years ago. Intuit is expected to offer Credit Karma a mixed cash and stock deal. The transaction will likely still have to go through regulatory approval and approval from the companies' respective boards.
Reports citing sources with knowledge of the matter claimed that Intuit will likely allow Credit Karma to function as a standalone business. This means that its CEO Kenneth Lin will likely still remain at his position. Credit Karma is currently one of the most popular personal finance platforms in the United States with over 85 million users. The company's platform provides its users with data-driven insights into their financial activity and credit scores.
While Intuit is mostly known for its consumer tax preparation, tax solution, payroll, and accounting software, the company is apparently interested in entering into the online personal finance market. Through the acquisition, Intuit should be able to tap into Credit Karma's vast data to offer in-depth financial recommendations to customers.
This could work hand-in-hand with some of the products it is already offering, including its popular bookkeeping and accounting program QuickBooks. Intuit also develops and sells other financial software products, including its TurboTax tax preparation application, its ProConnect tax solutions, multiple payroll software products. The California-based software firm currently has a market valuation of around $77 billion.
If the deal does push through, the merger between Intuit and Credit Karma would become the latest in a long line of mergers and acquisitions in the financial technology sector this year.
Last week, Morgan Stanley announced its intention to acquire discount brokerage firm E-Trade. The deal, which will be the largest acquisition made by the Wall Street bank since the financial crisis, is estimated to be worth more than $13 billion.
Last Month, Visa announced its plans of taking over financial technology company Plaid. The deal, estimated to be worth more than $5.3 billion, would give Visa access to other types of money transfer systems. The recent mergers have managed to shake up the global financial technology sector and similar transactions are expected to be announced in the coming quarters.
