NerdWallet (NASDAQ: NRDS) agrees to acquire Colorado-based On the Barrelhead, Inc., a robo-advisor for consumer debt.
The move will allow, On the Barrelhead to fully integrate into NerdWallet’s existing teams, brand, products and technology to enable consumers and SMBs to match with better financial products and make smarter money moves.
Per the terms, NerdWallet to acquire all of the outstanding shares of On the Barrelhead for total consideration of ~ $ 120 million, consisting of ~ $ 70 million in cash and $ 50 million in NerdWallet Class A common stock.
The NerdWallet equity issued as part of the transaction will be determined based on the 30-trading day volume-weighted-average price as of June 22, 2022, or $ 10.37 per share, and half of the equity will have a two-year lock- up restriction.
The company expects to finance the cash portion of the acquisition with borrowings from its existing credit facility.
A new compensatory bonus retention pool of ~ $ 30 million has been planned for On the Barrelhead management.
With the addition, NerdWallet (NRDS) advances toward becoming a trusted financial ecosystem by accelerating its data and technology capabilities.
In addition to NerdWallet’s ongoing expansion into new financial categories and geographies, this deal reinforces NerdWallet’s ability to vertically integrate, as proven with its successful acquisition of Fundera.
The deal will be accretive to NerdWallet’s 2022 revenue and adjusted EBITDA and reconfirms previously announced expected year-over-year increase in its 2022 annual adjusted EBITDA margin.
The transaction is expected to close in the third quarter of 2022.