Mergers & Acquisitions

Blackhawk Network Acquires CashStar in $175 Million Deal

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With Blackhawk Networks’ $175 million acquisition of fellow Finovate alum CashStar, we may soon learn just how good digital gifting is going to get.

Talbott Roche, CEO and president of Blackhawk Network, said the deal “strategically enhances Blackhawk’s ability to provide the right digital solutions to our partners to meet the changing needs of business customers and consumers.” She added that the acquisition made Blackhawk “a leading provider in the fast growing, first-party digital (gift card) market.” CEO and president of CashStar Ben Kaplan added that the combination of CashStar’s platform and Blackhawk’s “product breadth and global reach” would deliver “more powerful capabilities and new revenue opportunities for our clients and partners.” The acquisition will make CashStar a part of Blackhawk’s digital and incentives business, with Kaplan remaining on board to manage the business.

The acquisition is an all-cash deal which Blackhawk CFO Jerry Ulrich said would be “at least earnings neutral in fiscal 2017 and meaningfully accretive after synergies in 2018.” Ulrich also anticipates the acquisition will “generate positive cash flow in 2018” as well as boost topline growth.

CashStar’s platform gives retailers the ability to market, sell, and distribute both plastic and digital gift cards. The company offers a Commerce platform for merchants and an Exchange platform for gift card distributors and loyalty program managers. Founded in 2007 and headquartered in Portland, Maine, CashStar demonstrated its Digital Gifting and Incentives platform at FinovateFall 2011. The company added real-time card activation, security improvements, and streamlined ordering in its last platform upgrade in July, and in May, CashStar’s Velocity B2B division helped global prestige retailer Sephora to introduce a B2B gift card program.

This spring, the company partnered with discount gift card marketplace Raise in a deal that will give the Chicago-based startup access to more than 250 merchants and 40 payment processors. CashStar had raised $44 million in funding previous to this week’s acquisition, most recently completing a $15 million Series D in 2015. The company’s customers include Starbucks, The Home Depot, and Uber.

Headquartered in Pleasanton, California, Blackhawk Network demonstrated its GoWallet solution at FinovateFall 2012. Last month, the company partnered with fellow Finovate alum PayNearMe, giving the cash transaction network access to Blackhawk’s retail partners. In May, the San Francisco Business Times recognized Blackhawk’s Roche with its Inspire Award as part of its annual “Most Influential Women in Business” initiative. Also honored by the Times was the company’s Chief Marketing Officer, Teri Llach. Blackhawk Network trades on the NASDAQ exchange under the ticker “HAWK” and has a market capitalization of $2.5 billion.

Accenture Acquires Verax to Boost Canadian Operations

By Julie Muhn (@julieschicktanz) Posted on

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Consulting and technology services company Accenture acquired VERAX solutions last week. Terms of the deal with the Toronto-based company were not disclosed.

The acquisition is expected to enhance Accenture’s business services in Canada. Specifically, VERAX will bring its IT consulting initiatives across wealth management, brokerage and mutual funds, mobile and online banking, retail and commercial banking, and insurance and capital markets for a range of financial institutions.

Robert Vokes, managing director of Accenture’s Financial Services practice in Canada, said VERAX consultants will “greatly complement and enhance the breadth and depth of our financial services capabilities in Canada.” Vokes continued by saying that the merger will help clients “to react even more quickly and with even more confidence.”

Founded in 1951, Accenture serves clients in more than 120 countries across 40 industries. The company has made 15 consecutive appearances in Fortune’s World’s Most Admired Companies list and has 5,000 patents and patents pending in 44 countries.

At FinovateFall 2013, Accenture joined mBank on stage to showcase the Bank 3.0 revolution. The redesigned bank platform offers a modern user interface and user experience coupled with video banking, social channels, and gamification. Recently, Accenture launched a Fintech 71 accelerator program in Ohio, and formed a partnership with Apple to launch iOS-based business solutions.

LendingRobot and NSR Invest to Form Biggest Robo Advisor in Marketplace Lending

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P2P lending robo advisor LendingRobot will join NSR Invest, creating what the company called in a statement “the largest independent robo advisor in the alternative lending space.” LendingRobot explained in its blog that the “websites, operating, and trading systems” of each platform will continue to function as usual for the time being as the companies prepare to combine the two businesses. Formally, the acquisition involves Lend Core, the parent company of NSR Invest, acquiring Algorithmic Inc. and its assets, which include LendingRobot.

The new entity is expected to bring a variety of new innovations to the P2P alternative lending space, and LendingRobot pointed to its Lending Robot Series Fund, as an example of the types of products customers will see more of in the future. As reported in LendAcademy, the combined company will have more than 8,000 clients and $150 million in assets under management. NSR Invest co-founder and CEO Bo Brustkern will serve as CEO, with LendingRobot CEO and co-founder Emmanuel Marot remaining as a special advisor.

“We have long respected the work of the LendingRobot team and recognize that our companies are pursuing a common goal,” Brustkern explained. He added that the combination of the two companies will deliver “enhanced capabilities to our combined client bases today, and big plans for the future.” Marot highlighted the fact that the two companies had “taken different tracts to provide similar services” and that the time had come to marry “complimentary strengths.”

LendingRobot provides investors with the opportunity to invest in P2P loans as an asset class. The company’s platform uses machine learning and artificial intelligence to spot loans with risk and return profiles that suit individual investor preferences. LendingRobot automates loan selection to ensure that investor portfolios remain diversified and can be configured to continually-invest sidelined cash. Alternative lending platforms accessible through LendingRobot include fellow Finovate alums, Lending Club and Prosper.

Founded in 2012 and headquartered in Seattle, Washington, LendingRobot demonstrated its LendingRobot Dashboard at FinovateSpring 2016. Prior to its acquisition by NSR Invest, the company had raised $3 million in funding from investors including Runa Capital and Club Italia Investimenti.

Vipera Acquires SoftTelecom for $1.5 Million

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Mobile financial services company Vipera announced today it is acquiring SoftTelecom. The deal is expected to close for $1.5 million (€1.3 million).

Madrid-based SoftTelecom is a fintech and telecom software solutions company focused on open source technologies, including PSD2 and blockchain development projects. The company has 18 employees who serve clients in Madrid, the Netherlands, and the U.K. In 2016, SoftTelecom had an operating profit of $289,000 (€247,000) and recorded net assets of $856,000 (€734,000).

Vipera’s primary goal with the acquisition is to bolster product development. Specifically, the company sees SoftTelecom as a “launchpad for expanding Group sales into the Spanish market with a local delivery capability in the Iberian region. “London-based Vipera offers its MOTIF platform to clients in Asia, the Middle East, and Europe. MOTIF is comprised of three personal banking products: Mobile Banking, Mobile Payments, and Mobile Card Control.

Simon Pearce (Chief Commercial Officer) and Andrea Gambirasio (Head of Sales Support) demo Vipera’s MOTIF at FinovateEurope 2016 in London

At FinovateEurope 2016, Vipera demonstrated how MOTIF can generate location and context-based mobile offers. The personalized offers are sent to the user’s phone at an appropriate time to enhance the shopping experience and build user engagement with their bank. In the demo, the company’s Chief Commercial Officer Simon Pearce explained how the real-time contextual offers engine “can be used by banks and merchants to deliver appropriate offers right into the handset of the user with a reward or offer appropriate to them at the right time, but most importantly, in the right place.”

Vipera also announced today that Sella Bank Group has subscribed $2.9 million (€2.5 million) for 40 million shares in Vipera at a price of just over 7 cents per share. Last month, the company partnered with core banking provider Mambu and in April it won its largest contract to-date, worth $2.4 million in revenue.

Vipera was founded in 2005. Marco Casartelli is CEO.

Worldline Buys First Data Baltics for $85 Million

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European payments and transactional service provider Worldline has agreed to acquire First Data Baltics, the leading payment processor in the region, for $85 million (73 million euros). The deal is slated to be finalized in the third quarter of this year.

Worldline’s acquisition of the 200-person First Data Baltics branch helps the France-based company break into the Lithuanian, Latvian, and Estonian markets. Gilles Grapinet, Worldline CEO said that the deal is a “significant development” that will “accelerate the execution of our pan-European consolidation strategy in financial processing services.” Grapinet added, “In one transaction, we gain a leading position in the fast-developing countries of Latvia, Lithuania and Estonia, we reinforce our group capabilities in the north of Europe and will establish new relationships with numerous prestigious Baltic and Nordic banks.”

This marks the company’s second acquisition this year, after it acquired Digital River World Payments earlier this month. Worldline anticipates these acquisitions are the first of many for the company. Grapinet said that the company sees, “an unprecedented level of M&A opportunities in the payment space, notably in Europe.”

Founded in 1973, Worldline showcased a connected piggy bank. The IoT device pairs with a companion mobile app on a child’s phone to serve as a physical savings account for the kid. The app helps the child recognize and count their coins, while the parent-facing side of the app enables parents to deposit money into the child’s online account using NFC.

Worldline went public in 2014 and Earlier this week the company and Total partnered with InTouch to deploy Guichet Unique, a digital solution for retail networks. Worldline has ranked as a Market Leader in the Ovum Decision Matrix for its white label mobile wallet solution and was recently awarded Best Chile 2017 for its commitment to the well-being of its collaborators.

Urban FT Acquires iParse

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B2B digital banking platform Urban FT acquired Oregon-based iParse today. Urban FT plans to leverage iParse’s technology and its mobile banking-related patents.

Terms of the deal were not disclosed. Operations will continue as usual for iParse, which will function as a separate division from Urban FT. All staff (except for the founders, who are retiring) will continue as employees of Urban FT’s new unit. The company’s CEO, Richard Steggall, is calling the new deployment a “mobile banking plug-in solution” because it empowers financial institutions of any size to compete in the mobile banking space by plugging directly into their core, simulating integration. Urban FT estimates the mobile plug-in option will be available to clients within the next couple of months.

In the press release, Steggall said:

“The iParse tech strategically complements Urban FT’s suite of white-label mobile banking solutions by providing a proprietary way to bypass core processor integration, while delivering a robust mobile banking service for financial institutions to offer to their customers…. now credit unions and banks of any size can play—and play competitively—in the mobile banking space.”

Founded in 2013, Urban FT expects the number of bank clients it serves to double to more than 150 within the next year. Kasey Kaplan, Urban FT President said, “On the bank side, we size the market at approximately 12,500 potential targets, and we know that almost 42 percent of credit unions have yet to launch any form of mobile banking.”

At FinovateFall 2016, Urban FT debuted the Workshop, a real-time mobile app management platform that enables banks to quickly configure, brand, and launch mobile banking apps without coding. The company has 40 employees and, in addition to financial institutions, also serves clients in telecommunications, insurance, and travel. Among the New York-based company’s partners are Sprint, Boost Mobile, Yelp, Banc of California, and Sunrise Banks.

Nostrum Group Acquired by Equiniti Group

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Just a few days after Vantiv and Worldpay made merger and acquisitions headlines in the payments world, here come Equiniti and Nostrum Group with some M&A news of their own in the lending space. Announced today, Equiniti has agreed to acquire Nostrum Group in a deal that will boost Equiniti’s ability to provide technology-enabled lending solutions. Equiniti CEO Guy Wakeley said “The integration of Nostrum will provide greater depth, scale and capability in a dynamic growth market, whilst also providing the platform for a range of new products and services.”

Calling the acquisition “the next chapter in the development of our businesses,” Nostrum Group CEO Richard Carter described the combined entity as a blend of “Equiniti’s rich feature set and Nostrum’s agility.” Carter will stay on as Managing Director of the newly-formed Equiniti Credit Services brand.

Pictured: Nostrum Group CEO Richard Carter demonstrating the company’s Digital Lending Platform at FinovateEurope 2016.

Nostrum Group specializes in automated digital loan management software for banks and finance companies. The company’s technology provides solutions for every step of the process from originations (including application capture, processing, documentation, underwriting, and completion), servicing (including payment processing, document management, and reporting), and collections (including profiling and segmentation; payment and arrangements; work prioritization and automation; and third party management). More than focusing on acquiring new customers, Nostrum Group also offers tools lenders can use to retain their existing customers, as well. As Carter explained from the Finovate stage last year, Nostrum Group offers lenders the technology “to facilitate the production of appropriate offers that are tailored to those customers and then delivered to them.”

Headquartered in Harrogate, North Yorkshire, U.K. and founded in 2001, Nostrum Gr0up demonstrated its Digital Lending Platform at FinovateEurope 2016. Later that year, the company’s CTO Alex Stephen, Head of PMO Tom Martin, and Head of Software Development Simon Quin presented the “Nostrum Loan Engine API” at our developer’s conference in New York. This year, CEO Carter was named to the Maserati 100, a roster of top British entrepreneurs from high-end carmaker, Maserati, and The Sunday Times.

Technology services provider Equiniti was founded in 2009. Many of the largest pension schemes in the U.K., and 70% of the FTSE 100, use Equiniti services to manage share registration and related investors services. The company is listed on the London Stock Exchange under the symbol, “EQN,” and has a market capitalization of £750 million ($972 million).

 

Fiserv to Acquire Monitise for $89 Million

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Financial services company Fiserv has agreed to acquire U.K.-based Monitise for 2.9 pence per share, which equates to $89 million.

The acquisition comes after a storied history for Monitise, which was valued at $2.6 billion at its peak in 2014 and had formed successful partnerships with IBM, Santander, Telefonica, Virgin Money, and others. In 2015, however, the company changed its business model because of increased competition from tech giants such as Alphabet and Apple who offered mobile payment services for free. After the pivot, Monitise wasn’t able to recover and ended up putting itself up for sale in 2015.

Founded in 2003, Monitise demoed its mobile banking platform on a Nokia flip phone at FinovateFall 2007, the same year it went public on the London stock exchange. In 2009, Monitise’s mobile payments partner, Metavante, was acquired by Fiserv rival FIS. Most recently, Monitise launched FINkit, a cloud-based platform, in 2016 to foster collaboration between banks and fintechs. BehavioSec, Currencycloud, and Envestnet | Yodlee were among the founding FINkit members.

Fiserv anticipates the acquisition, which is subject to shareholder approval, to “accelerate the Fiserv digital strategy and the development of a next-generation digital banking platform for leading financial institutions worldwide.” The Wisconsin-based company will foster Monitise’s FINkit program to help its bank clients accelerate adoption of fintech services.

Jeffery Yabuki, Fiserv President and CEO said, “Monitise has been a global pioneer and innovator in digital banking for more than a decade.” He added, “Combining its talented associates and advanced technologies with leading digital solutions from Fiserv will expand our clients’ ability to provide differentiated experiences to their customers.”

Founded in 1984, Fiserv most recently presented at FinDEVr New York 2017, where the company’s Sr. Product Manager, Jon Zimmermann, and VP of Electronic Payments, Paul Diegelman, addressed the audience in a presentation titled Payments Processing: Bank-Grade Standards, Now Available to Anyone. Yesterday, the company announced that it will help banks and credit unions join the Zelle P2P payment network via its Turnkey Service for Zelle.

Algomi Acquires AllianceBernstein’s ALFA’s Fixed Income Liquidity and Analytics Tool

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In a deal announced this week, Algomi, a company that offers tools for buy-side and sell-side trading in fixed income securities, has acquired ALFA (Automated Liquidity Filtering & Analytics) from AllianceBernstein. The acquisition includes the IP and technology behind ALFA as well as the brand name. As a part of the acquisition, AllianceBernstein is taking an undisclosed, minority stake in Algomi, as well as a seat on the company’s Board.

Originally developed as an in-house liquidity tool, ALFA is now called Algomi ALFA. The solution provides cross-market information on liquidity and trading to give the buy-side a real-time view of the entire bond market. Algomi, which AllianceBernstein selected via a competitive process to take over ALFA, will become the sole marketer of Algomi ALFA, which will be sold to buy-side fund managers.

At FinovateFall 2014, Algomi debuted Honeycomb, a buy-side GUI that helps investors see which dealer is best to facilitate illiquid block trades without disturbing the market. Founded in 2012, Algomi has 140 employees with offices in London, New York, and Hong Kong. Earlier this year, the company received a $10 million investment from Euronext, boosting its funding to more than $10 million after Thomson Reuters CEO Tom Glocer invested an undisclosed amount of capital in a 2016 round.

KPMG Acquires Fintech Collaboration Specialist, Matchi

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Fintech matchmaker Matchi has made a major match of its own: The Hong Kong-based company agreed to an acquisition by KPMG this week. Terms of the deal were not immediately available.

Calling the combination of the two entities a “powerful fintech resource,” Matchi CEO David Milligan said that the acquisition will help Match “fulfill the promise of collaboration between financial institutions and fintech firms, which can ultimately benefit all consumers.” Global co-leader of Fintech for KPMG International, Ian Pollari called Matchi’s curated approach” as very different from the “fintech databases that merely provide lists.” He added “It is designed to identify, match, and enable collaboration with the most innovative fintechs and solutions to address specific issues being faced by financial institutions.”

Matchi’s platform featured more than 700 curated fintech solutions as well as a 2,500+ company database of fintech innovators that FIs can collaborate and work with. FIs can search for specific companies or technologies, and take advantage of Matchi’s Innovation Challenge feature by issuing a specific business issue or problem on the platform and see what fintechs are interested in pursuing a solution. “Finding fintech companies who are pre-validated, helps to reduce risks and can accelerate time to market,” Pollari explained.

Founded in 2013, Matchi demonstrated its technology at FinovateFall 2014. The company has played matchmaker for more than 100 leading banks and insurance companies worldwide, helping firms deploy a variety of technologies ranging from next generation payments to the blockchain. Last month, Matchi teamed up with ATB Financial and KPMG Canada to run a customer onboarding innovation challenge for fintech companies.