Intuit To Buy Electronic Clearing HouseIntuit To Buy Electronic Clearing House
The two firms had an agreement a year ago, but the deal fell apart when problems surfaced with ECHO's service to online gamers.
December 20, 2007
After Intuit's proposed acquisition of Electronic Clearing House fell apart a year ago, Intuit continued to believe the deal made sense. Now, a year later, Intuit, said on Wednesday the two firms have signed a definitive agreement for Intuit to acquire the company known as ECHO.
The deal is for $131 million and the acquisition will add ECHO's check, debit card, and credit card electronic payment processing capabilities to Intuit's broad base of financial management services. "Since our last discussions with ECHO, we've continued to survey the market and believe today, as we did then, that ECHO is a great strategic fit for Intuit," said Brad Smith, senior VP and general manager of Intuit's small business group, in a statement. "We expect ECHO's technology and operational assets will help us accelerate Intuit's growth and strengthen our expanding small business ecosystem that includes the fast-growing payments space." With ECHO, Intuit said it will round out its check services for merchants utilizing credit card, debit card, gift card, check verification, collection, guarantee, and conversion services. "The combined offerings," Intuit said, "will be designed to save merchants time and money." The two firms had reached an agreement last December with Intuit agreeing to acquire ECHO, but the deal fell apart when problems surfaced with ECHO's service to "Internet wallet" providers, which provide funds to online game participants. The difficulties caused ECHO to drop the service and the company focused on other products. The companies noted that ECHO has generated revenue growth since last December and agreed that the time is now ripe for a successful acquisition. Less than a month ago, Intuit moved to acquire Homestead Technologies for about $170 million. The Homestead acquisition is aimed at beefing up Intuit's online tools and services.
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