Report: Green Dot Wants to Buy UniRush
UPDATE: Late this afternoon, Green Dot confirmed that it will buy UniRush for $147 million, plus $20 million in “earn-out” payments. Please check back Tuesday for more information on this developing story.
Green Dot is “in talks” with UniRush, the company founded by hip-hop mogul Russell Simmons and which is behind the popular RushCard GPR product, according to Bloomberg. Neither company would comment on that report, and a search of U.S. Security and Exchange documents today found no relevant filings. Anonymous sources told Bloomberg that Green Dot had “entered into exclusive negotiations with UniRush after an auction for the company,” though the report pointed out that talks could still fail. A Bloomberg source pegged the value of UniRush at $150 million.
Were the deal to happen, it “would combine two of the largest, direct-to-consumer prepaid providers in the country,” says Ben Jackson, director of Mercator Advisory Group’s Prepaid Advisory Service. Green Dot, NetSpend and H&R Block represent the top three companies; he estimates that UniRush is in the top 10, and “maybe even in the top five.”
Combining Green Dot and UniRush would give Green Dot “access to a new set of customers, but not any entirely new set,” he says, pointing out that since 2013, “Green Dot has been the issuer and exclusive distribution partner of RushCard Live, which is the retail complement to UniRush’s online business.
More benefit may come from UniRush’s payroll card portfolio. A little more than two years ago UniRush bought the rapid! PayCard business from WEX Inc. The purchase gave UniRush control of one of the largest payroll card providers in the U.S., with more than 1,700 corporate relationships. “This could provide an opening to Green Dot to get into that business,” Jackson says.
The deal, if it comes to fruition, could suggest that the industry, which has been contracting through consolidation for the past several years, isn’t done yet. It’s important to note, however, that even though the number of companies offering prepaid products may be decreasing, growth in load value and volume continues to go up. Mercator Advisory Group, in fact, “forecasts that growth in the open-loop prepaid loads in the United States [will] be 7 percent through 2018, reaching a total of $343 billion.” Green Dot, in particular, has benefited from the consolidation trend, acquiring AccountNow and AchieveCard in 2015. Outside the GPR space, Blackhawk Network has been active in expanding through acquisitions in the incentives business, while Wirecard made headlines in 2016 with its plan to buy Citi Prepaid.