Cloud financial service provider Yodlee, which powers digital financial solutions for over 20 million paid users and over 850 financial institutions and financial technology innovators, announced yesterday (Aug. 10) that it will be acquired by wealth management technology provider Envestnet.
Envestnet will obtain all of the shares of Yodlee in a cash and stock transaction valued at $18.88 per share, representing a fully diluted equity value of approximately $660 million, a joint release from the companies confirmed.
“The acquisition of Yodlee is a watershed moment in the financial technology industry. We have long admired Yodlee’s innovative solutions and are excited to bring the companies together,” Envestnet Chairman and CEO Jud Bergman said in a company release.
“The union of these two pioneers will enable investors and the advisors who serve them to access and make better sense out of their disparate and complicated financial data. We believe this represents a quantum leap in accuracy and knowledge that will deliver better outcomes to improve the financial health of investors,” Bergman added.
The combination of the companies is anticipated to:
- Enhance Envestnet’s wealth management portfolio, advisor network and data analytics solutions with Yodlee’s cloud-based platform, which drives innovation through its APIs for financial institutions and financial technology innovators, ecosystem of digital financial apps and data analytics.
- Generate powerful cross-selling potential and market expansion by establishing a level of engagement between the financial advisors and investors.
- Add at least 100 basis points to Envestnet’s revenue growth rate and adjusted EBITDA growth rate next year, accelerating the combined company’s long-term growth profile.
“Yodlee is the preeminent name for data in financial services today. The core of every financial transaction and every financial decision is data. The Yodlee platform brings together client-permissioned financial data and analytics in unique ways to power personalized and dynamic financial apps and generate business insights,” said Bill Crager, president of Envestnet.
“Financial institutions, advisors and investment managers using the Envestnet platform will be able to provide a more interactive and informative digital advice experience for clients, powered by an expanding array of data mining and predictive analytical tools.”
Since its founding in 1999, the Redwood City, California-based Yodlee has amassed a network with more than 14,000 data sources and has been granted 72 patents. The company generated $98.6 million in revenue for the 12 months ended June 30, 2015, Yodlee confirmed.
Yodlee President and CEO Anil Arora, who upon the closing of the deal will become vice chairman of the combined company’s board of directors and chief executive of the Yodlee subsidiary, explained: “This is an exciting combination for our shareholders, clients and employees. Yodlee has taken the lead in building out a digital ecosystem with leading financial institutions and financial technology innovators for consumers and small to medium-sized businesses, and Envestnet has done the same for advisors.”
“The union of Yodlee and Envestnet will create a company unmatched in its ability to improve and simplify people’s financial lives around the world.”