FinTech Mergers & Acquisitions (America): July 2021

By Pavithra R

Mergers and Acquisitions (M&A) is a sector that is highly elastic in its behaviour. Successfully acquiring and integrating FinTech companies poses a major challenge.  The article lists selected FinTech M&A announcements made in July.

Square – Afterpay

Square, building simple tools to help people participate and thrive in the economy, and Afterpay, a leading “Buy Now, Pay Later” (BNPL) service provider, announced entering into a Scheme Implementation Deed under which Square has agreed to acquire all of the issued shares in Afterpay by way of a recommended court-approved Scheme of Arrangement. The transaction is expected to close in the first quarter of 2022, subject to the satisfaction of certain closing conditions.

The transaction has an implied value of approximately US$29 bn (A$39 bn) based on the closing price of Square common stock on July 30, 2021, and is expected to be paid in all stock. The acquisition will enable the companies to better deliver compelling financial products and services that expand access to more consumers and drive incremental revenue for merchants of all sizes.

Through the acquisition, Afterpay aims to accelerate Square’s strategic priorities for its Seller and Cash App ecosystems. Square plans to integrate Afterpay into its existing Seller and Cash App business units, enabling merchants to offer BNPL at checkout, give Afterpay consumers the ability to manage their installment payments directly in Cash App, and give Cash App customers the ability to discover merchants and BNPL offers directly within the app.

Bill.com – Invoice2go

Bill.com, a leading provider of cloud-based software that simplifies, digitizes, and automates complex, back-office financial operations for small and midsize businesses (SMBs) has announced signing a definitive agreement to acquire Invoice2go in a stock and cash transaction valued at approximately $625 mn.

Founded in 2002, Invoice2go is a leading, mobile-first accounts receivable (AR) software provider that empowers SMBs and freelancers to grow their client base, manage invoicing and payments, build their brand, and more. With offices in Sydney, Australia and Palo Alto, California, Invoice2go serves a large global customer base of small businesses.

The acquisition is expected to enhance Bill.com’s current AR offering and supports Bill.com’s mission to make it simple to connect and do business. Invoice2go’s AR solution makes it easy for businesses to engage and interact with their customers, generate professional invoices, and simplify their AR operations through mobile and desktop solutions.

U.S. Bank – PFM Asset Management

U.S. Bank has announced entering into a definitive agreement to purchase PFM Asset Management under its subsidiary, U.S. Bancorp Asset Management.

Under the agreement, PFM Asset Management will continue to operate as a separate entity. PFM Asset Management and U.S. Bancorp Asset Management had combined assets under management and assets under administration of more than $325 bn on March 31, 2021.

The deal is expected to close in the fourth-quarter 2021, subject to regulatory approval and satisfaction of customary closing conditions. Financial terms were not disclosed. PFM’s financial advisory business is not part of this acquisition and will continue to operate independently.

Blue Ridge Bankshares – FVCBankcorp

Blue Ridge Bankshares, the parent company of Blue Ridge Bank, National Association, and FVCBankcorp, the parent company of FVCbank, jointly announced that they have entered into a definitive agreement pursuant to which the companies will combine in an all-stock merger of equals to create the fourth-largest Virginia-headquartered community bank based on assets.

The partnership expects to create greater scale to drive growth, enhance profitability and improve shareholder value. The transaction leverages complementary market positions and creates a statewide institution with a presence in key Virginia markets.

The combination enhances revenue streams with increased sources of fee income and complementary product lines. The opportunities for improved profitability and enhanced revenue streams will create meaningful capital generation to further support technology initiatives and FinTech partnerships.

Circle – Concord Acquisition Corp

Circle, a global financial technology firm that provides payments and treasury infrastructure for digital businesses, has announced that it has entered into a definitive business combination agreement with Concord Acquisition Corp, a publicly traded special purpose acquisition company.

Under the agreement, a new Irish holding company will acquire both Concord and Circle and become a publicly traded company, expected to trade on the NYSE under the symbol “CRCL”. The transaction values Circle at an enterprise value of $4.5 bn.

Founded in 2013, Circle is a global FinTech firm that enables businesses of all sizes to harness the power of stablecoins and public blockchains for payments and commerce worldwide. Its mission of raising global economic prosperity through the frictionless exchange of financial value is being met through a series of internet-native, digital currency powered, transaction and treasury services that help businesses and financial institutions globally to take advantage of the shift to a digital currency and blockchain powered global financial system. Circle is the principal operator of the fastest growing dollar digital currency, USD Coin (USDC).