The acquisition is expected to advance the development of SoFi’s full-stack, multi-product, digital banking technology platform, among others
Technisys is a cloud-native digital banking platform. (Credit: Firmbee from Pixabay)
US-based digital personal finance company SoFi Technologies has agreed to acquire cloud-based digital banking platform Technisys in an all-stock deal worth around $1.1bn.
Under the terms of the agreement, Technisys’ shareholders are eligible to receive an aggregate consideration of around 84 million shares of SoFi common stock, subject to adjustments.
The transaction value is around 10% of SoFi’s market value, and was based on the volume weighted average price of SoFi common stock for a trading period of 20 days, ended 15 February 2022.
The acquisition is expected to complete by the second quarter of 2022, subject to satisfaction of certain closing conditions.
Upon closing, Technisys would operate as an independent subsidiary of SoFi Technologies, as part of its Technology Platform offering, with Miguel Santos continuing as CEO.
SoFi CEO Anthony Noto said: “Technisys has built an attractive, fast-growth business with a unique and critical strategic technology that all leading financial services companies will need in order to keep pace with digital innovation.
“The acquisition of Technisys is an essential building block in delivering on our member-centric, digital one-stop-shop experience for SoFi members and our partners through Galileo, our provider of fintech cloud services.
“Under the leadership of co-founder and CEO, Miguel Santos, Technisys has emerged as a proven leader in Gen 3 multi-product banking core technology.”
With the acquisition, SoFi benefits from Technisys’, strategic technology and business, to become a one-stop-shop financial services platform.
Together with the Galileo technology platform, the combined technology is expected to create an end-to-end vertically integrated banking technology stack.
The combination of Technisys’ platform with Galileo is expected to support checking, savings, deposits, lending, and credit card services, along with future products.
SoFi intends to save third-party costs by integrating the technology stack. It will migrate from the current multiple third-party cores to a single core operated by Technisys.
In addition, the transaction is expected to benefit the company with a high revenue growth rate, and advance its three-year revenue CAGR.
It is expected to drive an estimated cumulative incremental revenue of $500m to $800m through year-end 2025, at high margins.
Technisys CEO Miguel Santos said: “We are thrilled to bring Technisys’ technology, customer base, and expertise to the larger SoFi Technologies platform.
“We are confident that together, we can offer a best-in-class financial experience for traditional and non-traditional financial services players alike at a greater velocity than ever before.”