CU Solutions Group (CUSG) has agreed to purchase 60% stake in the CU Wallet for a five year $3m working capital loan and a $3m exchange of CUSG stock with existing CU Wallet ‘Class A’ shareholders.
Founded in 2013, CU Wallet’s on-device application and back-end infrastructure enables credit union members to make mobile purchases with any payment card on any device across multiple communications technologies.
The acquisition will support CUSG in developing mobile platforms, and to bring new solutions to market.
Leveraging CU Wallet’s shopping and payments platform, and strategic partnerships, CUSG aims to play a more strategic role in the US mobile payments market.
CUSG CEO Dave Adams said: “CU Solutions Group sees great synergy with the CU Wallet vision. We are interested in offering credit unions an array of mobile lifestyle apps that include a shopping/payments app such as CU Wallet.
“CU Solutions Group is committed to bringing great technology solutions to a wide group of credit unions not just the very largest. The goal is obviously to help credit unions maintain card interchange income and add value to their card offerings in a very dynamic payments space.
“We also see an opportunity to help fund and build upon the creative energy that Paul Fiore and his team bring to this technology. We look forward to this alliance that will help us with these objectives."
CU Wallet CEO and founder Paul Fiore said: “Today’s announcement represents a significant milestone in our company’s history and our team is thrilled to work together with CU Solutions Group to deliver innovative mobile solutions for credit unions.
“Like CU Wallet, CUSG is a credit union service organization, so this partnership furthers our aligned mission to provide credit unions with innovative technology that’s 100% driven by a team charged with serving their unique interests.
“The CU Wallet white label application that’s in market today offers credit union members a secure, compelling and convenient digital shopping experience, making it an ideal complement to CU Solution Group’s already robust suite of product and service offerings.”
Subject to customary closing conditions, the deal is expected to close in the first quarter of 2017.