Green Dot Nabs Tax Refund Processor for $320 Million (Sept. 18, 2014)
Green Dot Corp. has entered an agreement to acquire Santa Barbara Tax Products Group (TPG), the largest consumer tax refund processor in the U.S., for $320 million. The purchase bolsters Green Dot’s ability to serve low- and moderate-income households, adding tax refund processing to the company’s existing line of financial products, including prepaid cards.
“The segment of consumers who utilize TPG’s services are highly correlated to Green Dot’s customer segment,” noted Steve Streit, chairman and CEO, Green Dot. More than half of all tax refunds loaded to Green Dot’s prepaid cards in the most recent tax season were processed by TPG, Streit added. Given the strong customer overlap, “there is a significant revenue opportunity” in bundling Green Dot’s prepaid cards and checking accounts along with TPG’s tax refund processing services, he said. In 2011, Green Dot partnered with the U.S. Dept. of the Treasury on a pilot to distribute tax refunds to low- and medium-income households through Visa prepaid cards.
The acquisition is expected to close within the next 60 days. As a result of the transaction, the company revised its 2014 financial outlook, projecting an uptick in short-term operating expenses as it consolidates TPG’s earnings from the closing date through the end of the year. As a tax refund processor, TPG generates nearly all of its revenue during the first third of the year
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