Intuit Inc. continued stuffing its own holiday stocking on Thursday, announcing that it has inked a $142-million deal to acquire Electronic Clearing House Inc.
ECHO’s services are centered on debit and credit card processing -- billing its offerings as a complete solution for the payment processing needs of merchants, banks and collection agencies. The company’s services also include check verification, collection, and guarantee services and automatic clearinghouse capabilities.
Under the terms of the agreement, Intuit will pay $18.75 per share in cash in exchange for each share of ECHO common stock, including shares issuable upon exercise of options and ECHO will become a wholly-owned subsidiary of Intuit. ECHO’s stock was trading around $15 for most of Thursday.
“The acquisition of ECHO will expand Intuit’s reach and capabilities in the fast-growing payments market,” said Intuit president and chief executive Steve Bennett, in a statement. “It will enhance our leadership position with small and midsized businesses and help us accelerate growth.”
ECHO’s automatic clearinghouse capabilities will allow Intuit to round out its payment offering with check services, directing merchants through a single portal for the most commonly used payment methods. And, of course, the acquisition will expand Intuit’s sales and distribution channels, providing relationships with thousands of customers, including larger enterprise customers, such as retail and hotel chains.
The transaction is subject to regulatory review, ECHO shareholder approval and other customary closing conditions, and is expected to close in the first quarter of 2007. The boards of directors for both companies have already approved the deal.
Intuit has been making a strong push into the consumer financial services, purchasing Digital Insight Inc. earlier this month, a company which provides online services to banks.
