Green Dot in Provo, Utah, is splitting up to sell to CommerceOne Financial in Birmingham, Ala., and Smith Ventures.
The fintech said in a press release that the $835 million-asset CommerceOne will buy its bank and related assets and emerge as a new publicly traded company. Smith Ventures will buy and privatize Green Dot’s nonbank fintech assets and operations. The bank will serve as the fintech’s issuing bank under a seven-year contract.
CommerceOne will exchange $8.11 in cash and 0.2215 shares of the new publicly traded bank holding company. Former Green Dot investors will own about three-fourths of the new company.
Separately, Smith Ventures will pay $690 million in cash for the fintech business. About $470 million will be distributed to Green Dot shareholders, and $155 million will be invested into the bank. About $65 million will be used to pay off debt.
“This is a pivotal step for Green Dot and CommerceOne, bringing together a world-class embedded finance leader and a well-capitalized, trusted bank,” Bill Smith, CEO of Smith Ventures and a founding member of CommerceOne’s board, said in the release. “With these transactions, we will drive sustainable value creation for all stakeholders.”
“I believe this is an ideal complement to CommerceOne’s value proposition and vision for our future, which are centered on trust and exceptional client experiences – critical components to building a diversified, sustainable, growth-enabled banking model,” Kenneth Till, CommerceOne’s CEO, added.
The sales are expected to close in the second quarter.
Citi and Wachtell, Lipton, Rosen & Katz advised Green Dot. Stephens and Performance Trust Capital Partners advised Smith Ventures and CommerceOne. King & Spalding provided legal counsel to Smith Ventures, while Sullivan & Cromwell assisted CommerceOne.
Alvarez & Marsal, EY Parthenon, and Cornerstone Advisors provided additional consulting.