Green Dot Corporation has announced that it has entered into strategic agreements to be acquired by Smith Ventures and CommerceOne Financial Corporation.
As part of the deal, Smith Ventures will purchase and privatise Green Dot’s non-bank financial technology business assets and operations. However, the organisation will continue to run as an independent and growth-centred fintech and Embedded Finance company.
At the same time, CommerceOne will acquire Green Dot Bank and its associated assets and operations. Together, they will become a new publicly traded bank holding company that acts as the fintech’s exclusive issuing bank.
The transactions are set to occur concurrently, with them being subject to the receipt of required shareholder and regulatory approvals and customary closing conditions. According to the official press release, the three companies are expecting to finalise the transaction in the second quarter of 2026.
The terms of the deal
After the acquisition is finalised, each share of Green Dot is set to be exchanged for USD 8.11 in cash and 0.2215 shares of the new publicly traded bank holding company that will own CommerceOne’s existing business, including CommerceOne Bank and Green Dot Bank. Prior shareholders in Green Dot will own nearly 72% of the new publicly traded bank holding company, while former shareholders in CommerceOne will own 18% of the organisation.
When it comes to Smith Ventures, the company will acquire Green Dot’s non-bank financial technology business assets and operations from CommerceOne for USD 690 million, in an all-cash transaction. USD 470 million of that purchase price is set to be distributed to Green Dot Shareholders. USD 155 million will be invested in the bank to offer additional regulatory capital and liquidity, while nearly USD 65 million will be leveraged to pay off current indebtedness.
Furthermore, the fintech and the merged bank holding company are set to enter into a seven-year commercial relationship in which the latter will act as the exclusive bank sponsor for the former’s digital banking and Embedded Finance platform.
Strategic benefits
- Smith Ventures LLC is set to simplify the Green Dot non-bank businesses into an efficient Embedded Finance company;
- Smith Ventures will benefit from the experience of Green Dot’s existing human capital;
- The transaction facilitates a sponsor banking platform supporting Green Dot’s current expansive fintech and Embedded Finance business, with the ability to scale market share as a sponsor bank to other partners moving forward;
- The deal merges Green Dot Bank’s deposit-gathering platform with CommerceOne Bank’s asset generation capabilities;
- Future growth potential for Green Dot’s shareholders;
- Diversified revenue mix for the combined company, as well as an improved infrastructure and compliance profile.
