- Intuit – the company behind TurboTax, Mint, and QuickBooks – is buying the credit-score-monitoring company Credit Karma for $US7.1 billion.
- The deal was first reported over the weekend by The Wall Street Journal.
- A UBS analyst said the deal could help provide the boost Intuit needs to ramp up its artificial-intelligence offerings.
- Intuit shares were up about 2.5% on Monday afternoon.
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Intuit – the company behind TurboTax, Mint, and QuickBooks – is buying the credit-score-monitoring company Credit Karma for $US7.1 billion in cash and stock, the company announced on Monday after the market closed.
The deal is Intuit’s largest acquisition ever and the first big deal since Sasan Goodarzi took over as CEO about a year ago. The Wall Street Journal first reported on Saturday that the two companies were in talks about a deal.
Intuit’s stock was up about $US7, or 2.5%, on Monday afternoon, when the company announced quarterly earnings.
AI has been a focus for the bookkeeping-software company since Goodarzi took over. Jennifer Swanson Lowe, a UBS analyst, said data was essential to creating AI and that Credit Karma was built on using customer data, so it would greatly help Intuit’s efforts in the space.
Intuit and Credit Karma have been competing in some areas: Credit Karma already offers a free tax-filing service to compete with TurboTax and uses a similar model to the one that Goodarzi has envisioned for Intuit. Meanwhile, Intuit has its own Turbo, a free credit-score-checking service to compete with Credit Karma.
“By joining forces with Credit Karma, we can create a personalised financial assistant that will help consumers find the right financial products, put more money in their pockets and provide insights and advice,” Goodarzi said in a press release announcing the deal.
On a call with analysts after the announcement, Goodarzi said after the deal closes, Credit Karma will remain separate, and CEO Kenneth Lin will report to Goodarzi. Lin will continue to lead Credit Karma from its headquarters in San Francisco.
Intuit said it expected the deal to close in the second half of 2020 and that Intuit would provide updated guidance after the deal closes.
The news comes as Intuit released its second-quarter results for fiscal year 2020. Here is what the tax-filing-software maker reported:
- Revenue of $US1.7 billion for the quarter, higher than the $US1.68 billion that Wall Street expected. That’s a 13% increase from a year prior.
- Adjusted earnings per share of $US1.16, higher than the $US1.02 adjusted earnings per share that analysts expected.