Green Dot to buy Loopt
09 March 2012 | 4066 views | 0
Green Dot, the US prepaid card outfit with designs on entering the retail banking market, has agreed a deal to buy Loopt, a location-based mobile rewards marketing specialist, in a cash deal worth $43.4 million.
Green Dot says the acquisition will help it improve customer acquisition and retention of pre-paid debit card products; drive the adoption of new banking and payment products; and become a player in mobile wallets, rewards and payments at retailers nationwide.
Loopt also holds several patents related to mobile marketing in the context of location-based messaging delivered real-time to a mobile handset, which Green Dot believes will be "important strategic assets".
Steve Streit, CEO, Green Dot, says: "Loopt has innovative mobile technology, market leading mobile programming capabilities and compelling intellectual property. Meanwhile, Green Dot has a large customer base, a robust enterprise-level financial services infrastructure and retail point-of-sale financial transaction capabilities deployed at major retailers nationwide. When Loopt's assets are layered into Green Dot's platform, we believe that a significant opportunity emerges for Green Dot to become a large-scale player in mobile technology solutions at the retail point of sale."
The deal, slated to close by the end of Q1, caters for $9.8 million of the $43.4 million to be set aside as a retention pool for key Loopt employees. Green Dot expects the transaction will result in around $14 million of incremental operating expenses during the remainder of the year which will reduce previously guided 2012 adjusted Ebitda accordingly.