Cash App Announces Definitive Agreement to Acquire Credit Karma Tax
25 Novembre 2020 - 3:46PM
Business Wire
Cash App will provide millions of Americans
with the ability to electronically file their taxes
Square, Inc. (NYSE: SQ) has entered into a definitive agreement
with Credit Karma to acquire its tax business, Credit Karma Tax, on
behalf of Cash App, the financial services app that allows
individuals to spend, send, store and invest money. Square will pay
$50 million in cash for Credit Karma Tax, which provides a free,
do-it-yourself tax filing service for consumers.
Consistent with Square’s purpose of economic empowerment, Cash
App plans to offer the free tax filing service to millions of
Americans. The acquisition provides an opportunity to further
digitize and simplify the tax filing process in the United States,
expanding access to the one in three households which are unbanked
or underbanked. The tax product will expand Cash App’s diverse
ecosystem of financial tools — which currently includes
peer-to-peer payments, Cash Card, direct deposit, as well as
fractional investing in traditional stocks and bitcoin — giving
customers another way to manage their finances from their
pocket.
“We created Cash App to provide more access to the masses of
people left out of the financial system and are constantly looking
for ways to redefine our customers’ relationship with money by
making it more relatable, instantly available, and universally
accessible,” said Brian Grassadonia, Cash App Lead. “That’s why
we’re thrilled to bring this easy-to-use tax product to customers
as we continue to build out the suite of tools Cash App offers.
With this acquisition, we believe Cash App will be able to ease
customers’ burden of preparing taxes every year.”
"Filing taxes is critical and challenging for all Americans, and
in recent years we’ve seen more customers shift to filing taxes
themselves. Credit Karma Tax provides a seamless, mobile-first
solution for individuals to file their taxes at no cost,” said
Patrick Fink, Director of Engineering, Credit Karma Tax. “We’re
excited to be joining an entrepreneurial team and continue to build
simple, innovative tools for Cash App customers.”
The number of taxpayers who self prepare and e-File their own
tax returns has continued to grow in recent years. According to the
IRS, in the 2020 tax filing season, approximately one in two tax
filers or 80 million taxpayers prepared and electronically filed
their federal tax returns themselves, with an average refund of
more than $2,000. Credit Karma Tax helped more than two million
filers process their tax returns in the latest filing season.
Cash App launched in 2013 as a peer-to-peer money transfer
service. Today, Cash App customers have access to a multitude of
services and an integrated ecosystem of relevant financial services
for spending, sending, storing, and investing money. In the third
quarter of 2020, Cash App generated $385 million in gross profit,
or more than $1.5 billion on an annualized basis, and as of June
2020 had more than 30 million monthly active customers.
The completion of this transaction is subject to customary
closing conditions. The parties expect to close the transaction
before the end of 2020, and until close the two companies will
continue to operate independently. Square was advised by Fenwick
& West LLP and Cleary Gottlieb Steen & Hamilton LLP as
legal advisors and Credit Karma was advised by Goldman Sachs &
Co. LLC as financial advisor, with Skadden, Arps, Slate, Meagher
& Flom LLP and Wilson Sonsini Goodrich & Rosati serving as
legal advisors.
About Square, Inc.
Square, Inc. (NYSE: SQ) builds tools to empower businesses and
individuals to participate in the economy. Sellers use Square to
reach buyers online and in-person, manage their business, and
access financing. Individuals use Cash App to spend, send, store,
and invest money. Square has offices in the United States, Canada,
Japan, Australia, Ireland, Spain, and the UK.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. All statements other than statements
of historical fact could be deemed forward-looking, including, but
not limited to, statements regarding the proposed acquisition of
Credit Karma Tax by Square (the “Company”), the future performance
and expected financial results for future periods of the Company,
the Company’s ability to integrate Credit Karma Tax’s products into
its Cash App ecosystem, and the Company’s expectations regarding
scale, economics, and the demand for or benefits from its current
and future products, product features, and services. Such
statements are subject to a number of known and unknown risks,
uncertainties, assumptions, and other factors that may cause the
Company’s actual results, performance, or achievements to differ
materially from results expressed or implied in this press release,
and reported results should not be considered as an indication of
future performance. Investors are cautioned not to place undue
reliance on these statements.
Risks that contribute to the uncertain nature of the
forward-looking statements include, among others, the possibility
that the transaction will not close or that the closing may be
delayed; the ability to secure required regulatory approvals or
otherwise satisfy other closing conditions in a timely manner, or
at all; the possibility that the proposed transaction may not
advance the parties’ business strategies; the ability of Cash App
to retain the customers of Credit Karma Tax; the ability to realize
the expected benefits from the transaction in the expected time
period, or at all; disruptions from the transaction on ongoing
operations; inability to retain key personnel; potentially
incurring significant transaction costs; and unknown,
underestimated, or undisclosed commitments or liabilities, as well
as other risks listed or described from time to time in the
Company’s filings with the Securities and Exchange Commission (the
SEC), including the Company’s most recently filed Quarterly Report
on Form 10-Q or Annual Report on Form 10-K, which is on file with
the SEC and available on the Investor Relations page of the
Company’s website. All forward-looking statements are based on
information and estimates available to the Company at the time of
this press release and are not guarantees of future performance.
Except as required by law, the Company assumes no obligation to
update any of the statements in this press release.
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version on businesswire.com: https://www.businesswire.com/news/home/20201125005714/en/
Media Contact: press@squareup.com
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