Visa to acquire Plaid for $5.3 billion

Visa to acquire Plaid for $5.3 billion

Visa Inc. (NYSE: V) is acquiring a financial technology company for $5.3 billion, the company announced on Monday.

Visa Inc said on Monday it agreed to buy privately held software startup Plaid Inc in a $5.3 billion deal.

The acquisition of Plaid, which provides the intermediary technology between banks and payment services like Transferwise, Acorns, and PayPal Holdings Inc.'s (NASDAQ: PYPL) Venmo, represents both Visa's "entry into new businesses" and "complementary enhancements to existing businesses", the company said in a statement.

Visa and rival Mastercard Inc had invested in Plaid in a US$250 million series C funding round in 2018 that reportedly valued the firm at $2.65 billion.

"We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business", said Visa CEO Al Kelly.

Visa expects the acquisition, which will close in three to six months pending regulatory approval, to increase the company's revenue and profits starting next fiscal year.

The purchase price is twice the final private valuation and Visa is funding the transaction from cash on hand and debt issuance. Today, one in four people with a USA bank account have used Plaid to connect to more than 2,600 fintech developers across more than 11,000 financial institutions.

Visa and Plaid respectively used Lazard and Goldman Sachs as their financial advisors.

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