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U.S. Bancorp (USB) Agrees to Acquire Fintech Firm TravelBank
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U.S. Bancorp (USB - Free Report) , the parent company of U.S. Bank, has agreed to acquire San Francisco-based fintech firm, TravelBank, which offers technology-driven cost and travel management solutions. While financial details of the deal have not been disclosed, the agreement is expected to close in the fourth quarter of 2021.
For employees, TravelBank is easy to use as it helps businesses control and track expenses, automate processes, streamline approvals and reporting, and ensure compliance with company policies.
Shailesh Kotwal, the vice-chair of U.S. Bank's Payment Services segment, stated, "We are focused on giving businesses more confidence, control and convenience in managing payments and expenses. TravelBank will help us accelerate these efforts. In partnering with TravelBank over the past year, we've seen how effective the solution is in improving efficiencies for businesses. This acquisition will allow us to significantly expand our client base and deliver even more value to our customers."
The co-founder and CEO of TravelBank, Duke Chung, said, "With its track record of delivering innovative payment solutions that improve efficiencies for businesses, we couldn't be more excited to join the U.S. Bank family. We created TravelBank to provide a single experience for expense reporting and travel management. Our combined offering with U.S. Bank will be the most comprehensive expense, travel and payment management solution in the industry."
For U.S. Bank, which is already an industry leader in delivering innovative corporate payment solutions like virtual corporate credit cards and tools to improve working capital, the acquisition will help it in accelerating the integration of digital payments within its commercial segment.
Our Take
Supported by a solid balance sheet, U.S. Bancorp has been growing through acquisitions. Its inorganic growth efforts, combined with the ongoing investments in innovative product enhancements, services and people, have strengthened its balance sheet and fee-based businesses beside increasing market share.
This September, U.S. Bank closed the acquisition of another fintech company named Bento Technologies, which provides payment and expense management services to small and mid-sized businesses.
In the same month, U.S. Bancorp entered a definitive agreement to acquire MUFG Union Bank's core retail banking operations from Mitsubishi UFJ Financial Group (MUFG - Free Report) for a cash-and-stock transaction valued at $8 billion in a bid to boost its presence on the West Coast. The closure of the deal is expected in the first half of 2022.
Per the terms of the deal, the $8-billion deal includes $5.5 billion in cash and 44 million shares of U.S. Bancorp. This will lead to Mitsubishi UFG getting a 2.9% stake in U.S. Bancorp. Apart from the deal value, the Japanese parent will get dividends or share repurchases worth $9.6 billion at MUFG Union Bank, bringing the total value of the transaction to $17.6 billion.
The transaction, nonetheless, does not include the purchase of MUFG Union Bank's Global Corporate & Investment Bank, certain middle and back-office functions, and other assets.
Over the past year, shares of U.S. Bancorp have gained 39.9% compared with 56.5% growth recorded by the industry.
Several companies from the finance sector are undertaking consolidation efforts to counter the low interest rate environment along with the heightened costs of investments in technology. Also, mergers help in diversifying revenues and products.
Recently, Citizens Financial Group, Inc. (CFG - Free Report) completed its previously announced merger agreement to acquire JMP Group LLC. Citizens Financial announced the all-cash deal in September in a bid to augment its capital market capabilities.
The buyout is expected to foster growth, diversify Citizens Financial's capital market platform and provide greater scale in key verticals like healthcare, technology, financials and real estate.
Likewise, in an effort to broaden its capabilities for institutional investors and investment management clients, SEI Investments Company (SEIC - Free Report) acquired a global portfolio intelligence platform company, Novus Partners.
SEI Investments' chairman and CEO, Alfred P. West, Jr., stated, "The financial services landscape is ever-evolving. Our markets continue to face an unprecedented pace of change, and we continuously seek opportunities to stay ahead of and manage this change. By making strategic investments in our solutions and workforce, we drive growth and help our clients make confident decisions for their futures."
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U.S. Bancorp (USB) Agrees to Acquire Fintech Firm TravelBank
U.S. Bancorp (USB - Free Report) , the parent company of U.S. Bank, has agreed to acquire San Francisco-based fintech firm, TravelBank, which offers technology-driven cost and travel management solutions. While financial details of the deal have not been disclosed, the agreement is expected to close in the fourth quarter of 2021.
For employees, TravelBank is easy to use as it helps businesses control and track expenses, automate processes, streamline approvals and reporting, and ensure compliance with company policies.
Shailesh Kotwal, the vice-chair of U.S. Bank's Payment Services segment, stated, "We are focused on giving businesses more confidence, control and convenience in managing payments and expenses. TravelBank will help us accelerate these efforts. In partnering with TravelBank over the past year, we've seen how effective the solution is in improving efficiencies for businesses. This acquisition will allow us to significantly expand our client base and deliver even more value to our customers."
The co-founder and CEO of TravelBank, Duke Chung, said, "With its track record of delivering innovative payment solutions that improve efficiencies for businesses, we couldn't be more excited to join the U.S. Bank family. We created TravelBank to provide a single experience for expense reporting and travel management. Our combined offering with U.S. Bank will be the most comprehensive expense, travel and payment management solution in the industry."
For U.S. Bank, which is already an industry leader in delivering innovative corporate payment solutions like virtual corporate credit cards and tools to improve working capital, the acquisition will help it in accelerating the integration of digital payments within its commercial segment.
Our Take
Supported by a solid balance sheet, U.S. Bancorp has been growing through acquisitions. Its inorganic growth efforts, combined with the ongoing investments in innovative product enhancements, services and people, have strengthened its balance sheet and fee-based businesses beside increasing market share.
This September, U.S. Bank closed the acquisition of another fintech company named Bento Technologies, which provides payment and expense management services to small and mid-sized businesses.
In the same month, U.S. Bancorp entered a definitive agreement to acquire MUFG Union Bank's core retail banking operations from Mitsubishi UFJ Financial Group (MUFG - Free Report) for a cash-and-stock transaction valued at $8 billion in a bid to boost its presence on the West Coast. The closure of the deal is expected in the first half of 2022.
Per the terms of the deal, the $8-billion deal includes $5.5 billion in cash and 44 million shares of U.S. Bancorp. This will lead to Mitsubishi UFG getting a 2.9% stake in U.S. Bancorp. Apart from the deal value, the Japanese parent will get dividends or share repurchases worth $9.6 billion at MUFG Union Bank, bringing the total value of the transaction to $17.6 billion.
The transaction, nonetheless, does not include the purchase of MUFG Union Bank's Global Corporate & Investment Bank, certain middle and back-office functions, and other assets.
Over the past year, shares of U.S. Bancorp have gained 39.9% compared with 56.5% growth recorded by the industry.
Currently, U.S. Bancorp carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Competitive Landscape
Several companies from the finance sector are undertaking consolidation efforts to counter the low interest rate environment along with the heightened costs of investments in technology. Also, mergers help in diversifying revenues and products.
Recently, Citizens Financial Group, Inc. (CFG - Free Report) completed its previously announced merger agreement to acquire JMP Group LLC. Citizens Financial announced the all-cash deal in September in a bid to augment its capital market capabilities.
The buyout is expected to foster growth, diversify Citizens Financial's capital market platform and provide greater scale in key verticals like healthcare, technology, financials and real estate.
Likewise, in an effort to broaden its capabilities for institutional investors and investment management clients, SEI Investments Company (SEIC - Free Report) acquired a global portfolio intelligence platform company, Novus Partners.
SEI Investments' chairman and CEO, Alfred P. West, Jr., stated, "The financial services landscape is ever-evolving. Our markets continue to face an unprecedented pace of change, and we continuously seek opportunities to stay ahead of and manage this change. By making strategic investments in our solutions and workforce, we drive growth and help our clients make confident decisions for their futures."