Intuit nears deal to buy Credit Karma for US$7b: WSJ

Seoul

INTUIT Inc is close to buying Credit Karma Inc for about US$7 billion in cash and stock deal, the Wall Street Journal reported, citing people familiar with the matter it didn't identify.

The purchase, which could be announced by Monday, will push the maker of TurboTax deeper into the consumer finance space, the newspaper said. The acquisition would also be Intuit's largest in its 37-year history, it added.

Broadening its sales base is important at a time when Morgan Stanley said it's expecting tax-preparation software companies to face headwinds for the revenue they get from each tax return this year due to the combined effect of a rising mix of free filings and lower need for services that assist do-it-yourself filers.

Still, Morgan Stanley analyst Keith Weiss had expected Intuit to hit the high end of its implied consumer tax guidance as TurboTax continues to gain market share. Intuit shares have risen 14 per cent since the start of the year, compared with a 3.3 per cent advance in the S&P 500 Index.

Under current negotiations, closely-held Credit Karma would operate as a standalone unit with its chief executive officer Kenneth Lin staying in charge, one person told the paper. The San Francisco-based company is backed by funds such as private-equity firm Silver Lake and financial-technology venture firm Ribbit Capital, it added.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Credit Karma, which was co-founded by Mr Lin, was considering an initial stock offering before late-2019 amid a series of weak-performing trading debuts, the newspaper said. Its website gives users access to credit scores and recommends financial products from credit cards to personal and car loans. BLOOMBERG