Prepaid debit card company Green Dot Corporation announced today an agreement to acquire Loopt Inc., a mobile marketing company based in Mountain View, Calif. Green Dot said the transaction is expected to close by the end of Q1 2012.
Green Dot said Loopt gives the company some strategic benefits such as improved customer acquisition and retention of its prepaid debit card products, drive the adoption of new banking and payment products for new customer segments, and most importantly, give Green Dot a boost in mobile wallets.
Additionally, Green Dot said Loopt's patent portfolio, including patents for real time location-based messaging to handsets, will be of significant value as it looks at mobile business opportunities.
"We believe that mobile phones have the potential to change the way people interact with their bank, control their money and pay for goods and services," said Green Dot CEO and Chairman Steve Streit in the announcement.
According to Streit, Loopt has innovative mobile technology, mobile programming capabilities and IP that will combine well with Green Dot's customer base, financial services infrastructure and point-of-sale financial transaction capabilities.
"When Loopt's assets are layered into Green Dot's platform, we believe that a significant opportunity emerges for Green Dot to become a large-scale player in mobile technology solutions at the retail point of sale," Streit said.
"As this technology truly reaches the masses, I believe we're going to see the banking and payments industry fundamentally reshaped in a way that's better for everyone," said Loopt co-founder and CEO Sam Altman
The Loopt purchase will set Green Dot back $43.4 million in cash. Of that, $9.8 million will be set aside as a retention pool for key Loopt employees. The company said it expects the Loopt acquisition to increase incremental operating expenses by $14 million.
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