M&A: MetaBank Finalizes Fort Knox Deal; Finicity Acquires Aurora Financial Systems (Sept. 9, 2015)
Consolidation in the payments industry continues as MetaBank expands its presence in the tax services space with the completion of its acquisition of Fort Knox Financial Services Corp., and Finicity Corp. continues its fintech investment by buying payment processor and program manager Aurora Financial Systems Inc.
Meta Financial Group Inc. subsidiary MetaBank has finalized a deal announced in July to acquire all of the related assets and liabilities of Fort Knox and its subsidiary, Tax Product Services LLC. Assets include Fort Knox’s operating platform and Refund Advantage trade name. Refund Advantage provides professional tax refund-transfer software services used by independent electronic refund originators and their customers. Refund Advantage provided income tax refund-transfer software services in more than 10,000 locations nationwide, and in 2015, Fort Knox processed more than 1 million refund-transfers through ACH direct deposit, check and prepaid card.
The acquisition price included the payment of approximately $26 million in cash and the issuance of 581,260 shares of the company’s common stock to shareholders of Fort Knox, according to the Sioux Falls, S.D.-based MetaBank. The cash portion of the purchase price was funded from the proceeds of the previously announced private placements of the company’s common stock to certain institutional investors. MetaBank has hired Fort Knox management and staff, and the operations of the Fort Knox business will continue to be based in Louisville, Ky.
“The completion of the Fort Knox acquisition expands our platform in the tax services space, providing additional, relevant financial solutions to our partners and customers,” said MetaBank CEO J. Tyler Haahr.
MetaBank is not the first noteworthy prepaid provider to expand its tax refund business through acquisition. Green Dot Corp. in August 2014 acquired Santa Barbara Tax Products Group, the largest consumer tax refund processor in the U.S., for $320 million.
In other M&A news, Murray, Utah-based Finicity, a global fintech services company, said its acquisition of Aurora Financial, which became official last week, gives the company aggregation, transaction processing and card program management capabilities, along with real-time transaction data delivery to support online and mobile financial apps. Aurora is now part of Finicity’s data services division and will be led by Aurora founders Michael Ciberey and Chris Melendez. Financial terms of the acquisition were not disclosed.
The ability to issue prepaid cards, complemented by Finicity’s personal finance application, Mvelopes, integrated self-paced learning and one-on-one budget coaching, provides consumers with a full suite of tools, education and accountability that can help them master their budgets and take control of their financial lives, according to Finicity.
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