Acquisition Accelerates SoFi’s Development of a
Unique Full-Stack, Multi-Product, Digital Banking Technology
Platform Offering Best-of-Breed Financial Products and Services
SoFi Technologies, Inc. (NASDAQ: SOFI), (“SoFi”), the digital
personal finance company, today announced that it has entered into
a definitive merger agreement (the “Merger Agreement”) to acquire
Technisys, a leading cloud-native, digital multi-product core
banking platform. Technisys’ shareholders will receive aggregate
consideration of approximately 84 million shares of SoFi common
stock, less than 10% of SoFi’s fully diluted share count as of
September 30, 20211, subject to customary adjustments set forth in
the Merger Agreement. These shares have an aggregate value of
approximately $1.1 billion based on the volume weighted average
price of SoFi common stock for the 20-trading day period ended
February 15, 2022. The transaction is expected to close by the
second quarter of 2022, subject to the satisfaction of closing
conditions.
“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,” said Anthony Noto, CEO of
SoFi. “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. We are excited to bring their technology
offering under the SoFi Technologies umbrella and deliver it to
hundreds of millions of customers worldwide.”
The acquisition of Technisys adds a unique, strategic technology
and business for SoFi in pursuing its ambition to provide
best-of-breed products as a one-stop-shop financial services
platform and for Galileo, in SoFi’s overall pursuit to build the
AWS of fintech. The combined technology stack will create what is
expected to be the only end-to-end vertically integrated banking
technology stack, from user interface development capabilities to a
customizable multi-product banking core and ledger with fully
integrated processing and card issuing available for SoFi products
and Galileo/Technisys partners. The combination of Technisys’
platform with Galileo will uniquely support multiple products -
including checking, savings, deposits, lending, and credit cards –
as well as future products, all surfaced through industry-leading
APIs. Together, Galileo and Technisys are expected to enable the
combined company to meet both the expanding needs of their existing
partners, as well as serve additional established banks, fintechs
and non-financial brands looking to enter financial services.
The acquisition will also add to the high revenue growth rate of
SoFi and accelerate its three-year revenue CAGR. Together, the
companies can better serve Galileo’s consumer fintech and
enterprise partners seeking to add product offerings to their 89
million enabled customer accounts (as of September 30, 2021) across
the U.S., Mexico and Colombia, and Technisys’ more than 60
established bank, fintech, and non-financial brands in Latin
America and the U.S., while expanding both companies’ partner bases
in the U.S. and an addressable market across 16 countries. The
estimated incremental revenue from the acquisition, including base
revenue of Technisys and revenue synergies of the vertically
integrated capabilities, is expected to add a cumulative $500 to
$800 million through year-end 2025, at high incremental
margins.
SoFi also expects to leverage this modern technology stack to
capture significant savings in third-party costs by integrating
Technisys. Once SoFi has migrated off its current multiple
third-party cores to a single owned and operated Technisys core, it
expects to be able to innovate even faster, perform more real-time
decisioning, and offer greater personalization for its more than
three million members. SoFi estimates this shift and the vertical
integration with Galileo will create approximately $75 to $85
million in cumulative cost savings from 2023 to 2025 and
approximately $60 to $70 million annually thereafter.
“We are thrilled to bring Technisys’ technology, customer base,
and expertise to the larger SoFi Technologies platform,” said
Miguel Santos, CEO of Technisys. “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.”
Technisys’ revenue growth is accelerating and is on track to
deliver approximately $70 million in revenue for calendar-year 2021
on an unaudited IFRS basis. The acquisition is expected to deliver
to SoFi a mid-teens internal rate of return (IRR) on a standalone
basis through 2025, with significant upside in the IRR when
accounting for anticipated revenue and cost synergies.
Following the closing of the acquisition, Technisys is expected
to operate as an independent subsidiary of SoFi Technologies, Inc.
and be part of its Technology Platform offering, with Miguel Santos
continuing as CEO.
Transaction Conference Call & Investor
Presentation
In connection with this announcement, SoFi management will host
a conference call to discuss the proposed transaction on Tuesday,
February 22, 2022 at 8 a.m. Eastern Time. Please register for the
call using the following link:
https://www.incommglobalevents.com/registration/q4inc/10173/sofi-acquisition-of-technisys-conference-call/
A presentation outlining the proposed transaction is also
available on both SoFi’s Investor Relations website,
https://investors.sofi.com, and Technisys’ Corporate website at
https://www.technisys.com/categories/press-releases/.
Q4 Results and 2022 Outlook
As announced on January 24, 2022, SoFi plans to release its
fourth quarter and fiscal year 2021 results and post them to the
Investor Relations section of its website at
https://investors.sofi.com, after the close of the financial
markets on Tuesday, March 1, 2022, with a conference call to follow
at 5 p.m. Eastern Time. Management maintains its previously
communicated financial guidance for the fourth quarter and full
year 2021. As part of the communications on March 1 related to
fourth quarter and full year 2021 financial results, SoFi will
provide financial guidance for 2022 that incorporates the estimated
impact of recent developments including the proposed acquisition of
Technisys, the impact of opening SoFi Bank, and the extension of
the federal student loan payment moratorium scheduled from January
31, 2022 to May 1, 2022.
Advisors
Allen & Company LLC served as financial advisor and
Wachtell, Lipton, Rosen & Katz acted as legal advisor to SoFi.
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
acted as legal advisor to Technisys.
About SoFi Technologies, Inc.
SoFi helps people achieve financial independence to realize
their ambitions. Our products for borrowing, saving, spending,
investing, and protecting give our more than three million members
fast access to tools to get their money right. SoFi membership
comes with the key essentials for getting ahead, including
financial and career advisors, plus connection to a thriving
community of like-minded, ambitious people. SoFi is also the naming
rights partner of SoFi Stadium, home of the Los Angeles Chargers
and the Los Angeles Rams.
About Technisys
Technisys is a leading next-gen digital and core banking
platform that redefines the customer experience. As a best-in-class
technology platform, Technisys uniquely delivers differentiation in
two key ways, by empowering financial institutions to dynamically
create tailored financial products at the speed of commerce and by
offering meaningful recommendations to customers at point of need.
Technisys uses data-driven insights and integrates them with its
unique technology that enables structural flexibility that allows
financial institutions to create and tailor any financial product –
in real time – to deliver a seamless digital experience at every
customer touchpoint whether online, on the phone, or at a branch.
This gives banks and fintechs the agility to tailor offerings that
become integral to a customer’s lifestyle.
Availability of Other Information About SoFi
Investors and others should note that we communicate with our
investors and the public using our website (https://www.sofi.com/),
the investor relations website (https://investors.sofi.com), and on
social media (Twitter and LinkedIn), including but not limited to
investor presentations and investor fact sheets, U.S. Securities
and Exchange Commission (“SEC”) filings, press releases, public
conference calls and webcasts. The information that SoFi posts on
these channels and websites could be deemed to be material
information. As a result, SoFi encourages investors, the media, and
others interested in SoFi to review the information that is posted
on these channels, including the investor relations website, on a
regular basis. This list of channels may be updated from time to
time on SoFi’s investor relations website and may include
additional social media channels. The contents of SoFi’s website or
these channels, or any other website that may be accessed from its
website or these channels, shall not be deemed incorporated by
reference in any filing under the Securities Act of 1933, as
amended. This material has been prepared for informational purposes
only, and is not intended to provide, and should not be relied on
for, tax, legal or accounting advice. You should consult your own
tax, legal and accounting advisors before engaging in any
transaction.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains certain forward-looking statements,
including, but not limited to, certain plans, expectations, goals,
projections, and statements about the benefits of the proposed
transaction, the plans, objectives, expectations and intentions of
SoFi and Technisys, the expected timing of completion of the
transaction and other statements that are not historical facts.
Such statements are subject to numerous assumptions, risks and
uncertainties. These forward-looking statements are not guarantees
of performance. Such statements can be identified by the fact that
they do not relate strictly to historical or current facts. Words
such as “anticipate”, “believe”, “continue”, “could”, “estimate”,
“expect”, “intend”, “may”, “opportunity”, “future”, “strategy”,
“might”, “plan”, “possible”, “potential”, “predict”, “project”,
“should”, “strive”, “would”, “will”, “will be”, “will continue”,
“will likely result” and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking.
Factors that could cause actual results to differ materially
from those contemplated by these forward-looking statements
include: the effect and uncertainties related to the COVID-19
pandemic (including any government responses thereto); SoFi’s
ability to achieve and maintain profitability in the future; the
impact on SoFi’s business of the regulatory environment and
complexities with compliance related to such environment; SoFi’s
ability to respond to general economic conditions; SoFi’s ability
to manage its growth effectively and its expectations regarding the
development and expansion of its business; SoFi’s ability to access
sources of capital, including debt financing and other sources of
capital to finance operations and growth; the success of SoFi’s
continued investments in its Financial Services segment and in its
business generally; the success of SoFi’s marketing efforts and its
ability to expand its member base; SoFi’s ability to maintain its
leadership position in certain categories of its business and to
grow market share in existing markets or any new markets it may
enter; SoFi’s ability to develop new products, features and
functionality that are competitive and meet market needs; SoFi’s
ability to realize the benefits of its strategy, including what
SoFi refers to as its financial services productivity loop; SoFi’s
ability to make accurate credit and pricing decisions or
effectively forecast its loss rates; SoFi’s ability to establish
and maintain an effective system of internal controls over
financial reporting; SoFi’s ability to realize the anticipated
benefits of its acquisition of Golden Pacific Bank; the impact of
additional regulation as a result of SoFi’s becoming a bank holding
company; SoFi’s ability to operate SoFi Bank pursuant to its
operating agreement with the Office of the Comptroller of the
Currency; the outcome of any legal or governmental proceedings that
may be instituted against SoFi; the occurrence of any event, change
or other circumstances that could give rise to the right of SoFi or
Technisys to terminate the Merger Agreement; the outcome of any
legal proceedings that may be instituted against SoFi or Technisys;
delays in completing the transaction; the failure to satisfy any of
the conditions to the transaction on a timely basis or at all; the
possibility that the anticipated benefits of the transaction are
not realized when expected or at all, including as a result of the
impact of, or problems arising from, integration or as a result of
changes in economic or market environments and competitive factors;
the possibility that the transaction may be more expensive to
complete than anticipated, including as a result of unexpected
factors or events; diversion of management’s attention from ongoing
business operations and opportunities; potential adverse reactions
or changes to business or employee relationships, including those
resulting from the announcement or completion of the transaction;
the dilution caused by SoFi’s issuance of additional shares of its
capital stock in connection with the transaction; and other factors
that may affect the future results of SoFi and Technisys.
Additional factors that could cause results to differ materially
from those described above can be found in SoFi’s Quarterly Report
on Form 10-Q for the quarterly period ended September 30, 2021,
which is on file with the SEC and available on SoFi’s investor
relations website, https://investors.sofi.com, under the heading
“Financials,” and in other documents SoFi files with the SEC.
All forward-looking statements speak only as of the date they
are made and are based on information available at that time.
Neither SoFi nor Technisys assumes any obligation to update
forward-looking statements to reflect circumstances or events that
occur after the date the forward-looking statements were made or to
reflect the occurrence of unanticipated events except as required
by federal securities laws. As forward-looking statements involve
significant risks and uncertainties, caution should be exercised
against placing undue reliance on such statements.
SOFI-F
1 As of September 30, 2021, SoFi had approximately 895 million
shares of common stock outstanding on a fully diluted basis. This
figure includes common shares outstanding, unvested restricted
stock units, 15.2 million SoFi Technologies warrants that were
subsequently redeemed, and common stock options and Series H
warrants (both as converted using the treasury stock method,
closing SoFi common stock share price as of September 30, 2021, and
the weighted average strike price of each respective security).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220222005602/en/
Investors: Andrea Prochniak SoFi aprochniak@sofi.org
Media: Rachel Rosenzweig SoFi rrosenzweig@sofi.org
Louise Finlay Technisys lfinlay@technisys.com
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