By Dhirendra Tripathi
Investing.com – SoFi Technologies (NASDAQ:SOFI) stock traded 3.3% lower in premarket Tuesday on fears of equity dilution due to its reported plans to buy banking-software maker Technisys in an all-stock deal.
According to a report in The Wall Street Journal, the deal is worth $1.1 billion, equivalent to roughly 10% of SoFi’s market value.
The deal gives SoFi control of its own core banking platform, the back-end technology that allows customers to bank from anywhere and helps lenders provide them end-to-end services. SoFi offers home and auto loans, stock and cryptocurrency trading, and wealth management services.
The WSJ report said SoFi estimates the Technisys acquisition to generate up to $800 million in additional revenue through 2025. It will also create up to $85 million in cost savings over that period.
SoFi expects to be a bank soon. Last month, the Comptroller of the Currency and the Federal Reserve approved its applications to become a bank holding company through its proposed acquisition of Golden Pacific Bancorp. SoFi expects the acquisition to close this month, and operate its bank subsidiary as SoFi Bank, National Association.
SoFi started trading on June 1, 2021, after its merger with Social Capital Hedosophia Holdings V, a blank check company run by tech investor Chamath Palihapitiya.