Intuit Inc. and private equity fund Thoma Bravo announced Monday they had reached a definite agreement for Thoma Bravo to acquire Intuit Financial Services for $1.025 billion.
The cash deal, which is subject to regulatory review, is expected to close in a few months
Per numbers provided by Callahan & Associates to Credit Union Times, 339 credit unions use IFS for Internet home banking.
The total number of online banking customers is several times that, said industry sources. Those numbers include both banks and credit unions. Intuit had not responded to a request for an updated count of credit union customers.
IFS’s digital banking operations originated as Digital Insight in 1995, the year it was founded by two former staffers of credit union core processor XP Systems. In 2007 it was sold to Quicken owner Intuit and in 2010 the Digital Insight name was retired.
In the press release announcing the deal Monday, Thoma Bravo indicated its intent to invest in IFS was to raise the group’s digital game.
“IFS is the premier provider of online and mobile banking software to financial institutions, markets which should continue to see secular growth and further end-user adoption," said Holden Spaht, partner at Thoma Bravo, in a prepared statement. "Thoma Bravo will continue to support the company's mission of providing best-in-class products to support its large base of customers and end users."
Included in the sale are IFS’ Internet banking platform, digital payments, mobile banking, FinanceWorks personal financial management software, and digital banking add-on solutions as well as third-party solutions. Certain other assets – including Mint.com – are excluded from the sale and will remain at Intuit.
In a statement, Intuit CEO Brad Smith explained why Intuit made this move: "Intuit will sharpen its focus on directly serving consumers and small businesses, and continuing to build our durable competitive advantage in those segments."
IFS, by its nature, is a business-to-business play that, apparently, no longer fits in the Intuit portfolio.
In response to a request to clarify the possible impacts on credit unions of this sale, an Intuit spokesperson emailed: “It’s really too early to say. We’ll be able to talk more about next steps when we get to the close in the next few months.”
Thoma Bravo, in its boilerplate, in part says this about the company: “Thoma Bravo is a leading private equity investment firm building on a 30+ year history of providing equity and strategic support to experienced management teams and growing companies. … Thoma Bravo invests across multiple industries, with a particular focus on application and infrastructure software and financial and business services. …Thoma Bravo has invested in 26 companies that have completed 60 add-on acquisitions to produce total annual earnings of approximately $1 billion.”