Visa to acquire Plaid for $5.3bn
- Benjamin Towle
- Aug 6, 2020
- 1 min read
Updated: Sep 4, 2020
Who?
Acquirer: Visa
A global payments technology company working to enable consumers, businesses, banks and governments to use digital currency.
Seller (Target): Plaid
Plaid’s technology platform enables users’ bank account to be connected with mobile apps such as Venmo. Plaid focuses on enabling consumers and businesses to interact with their bank accounts, check balances, and make payments through financial technology applications.
The Deal
Value: $5.3bn ($4.9bn Cash and $400m restricted stock option)
Announced: January 13th 2020
Financial Advisor to Visa: Lazard
Financial Advisor to Plaid: Goldman Sachs
Why?
Strategic Rationale:
Attached (on the right) is a great presentation that concisely illustrates the strategic reasoning behind the acquisition.
Interestingly:
– Plaid received strategic investment from both Visa and Mastercard (one of Visa’s top competitors) in 2018 during a Series C round of funding, which valued Plaid at $2.6bn.
– In August 2019 Mastercard also announced their intended acquisition of payments platform Nets for €2.85bn ($3.2bn at time of purchase).
– There is some speculation that Visa might be taking defensive action, as the core credit card business could be vulnerable to disruption.
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