Mastercard to acquire financial data provider Finicity for $825m
Finicity’s existing shareholders have the potential for an earn-out of up to an additional $160 million, if performance targets are met.
Mastercard Inc (NYSE:MA) today announces it has entered into an agreement to acquire Finicity, a North American provider of real-time access to financial data and insights. The purchase price is $825 million, and Finicity’s existing shareholders have the potential for an earn-out of up to an additional $160 million, if performance targets are met.
The addition of Finicity’s complementary technology and teams is poised to strengthen the existing Mastercard open banking platform and to enable and safeguard a greater choice of financial services, reinforcing the company’s long-standing partnerships with and commitment to financial institutions and fintechs across the globe.
Mastercard has increasingly invested in the open banking space over several years, including the 2019 launch of a set of comprehensive open banking solutions in Europe. The combination of these efforts with the Finicity technology powering platforms such as Quicken Loans Rocket Mortgage and Experian Boost has the potential to shape the next generation of open banking services.
Today, Mastercard open banking services in Europe feature connections to more than 1,800 financial institutions. With a direct connection to the North American banking, lending and wealth management ecosystem, Mastercard is set to extend Finicity’s reach to be a one-stop partner for any consumer, bank, merchant, fintech or government’s data, payment and open banking needs.
Following the completion of the transaction, Mastercard’s existing technology and expertise combined with Finicity’s new analytics platforms, will help streamline the credit decisioning process for consumers and small businesses. Additionally, the integration of Finicity’s account owner verification tools to Mastercard’s New Payment Platform capabilities will deliver an improved ACH and real-time payments experience to consumers, merchants and businesses.
Mastercard does not expect this acquisition to be incrementally dilutive to its business for greater than 24 months. This dilution is driven by investments in the business, including its international expansion, as well as the impact of purchase accounting and integration related costs.
The transaction, which is anticipated to close by year’s end, is subject to regulatory review and other customary closing conditions.