Friday 27 November 2020

San Francisco-based financial services company Square, Inc. (NYSE: SQ) has agreed to acquire Credit Karma Tax, the tax business of Credit Karma, on behalf of financial services app, Cash App, for USD 50m in cash, the company said.

The acquisition of Credit Karma Tax, will give millions of Americans the ability to electronically file their taxes for free.

The acquisition provides an opportunity to further digitise and simplify the tax filing process in the United States, expanding access to the one in three households which are unbanked or underbanked.

The tax product will expand Cash App's diverse ecosystem of financial tools, which currently includes peer-to-peer payments, Cash Card, direct deposit, as well as fractional investing in traditional stocks and bitcoin -- giving customers another way to manage their finances from their pocket.

Square was advised by Fenwick and West LLP and Cleary Gottlieb Steen and Hamilton LLP as legal advisors and Credit Karma was advised by Goldman Sachs and Co. LLC as financial advisor, with Skadden, Arps, Slate, Meagher and Flom LLP and Wilson Sonsini Goodrich and Rosati serving as legal advisors.

Square, Inc. is an American financial services, merchant services aggregator, and mobile payment company.