Green Dot To Buy Santa Barbara For About $320 Mln, Cuts FY14 Earnings View

(RTTNews) - Bank holding company Green Dot Corp. (GDOT) Thursday said it will buy Santa Barbara Tax Products Group for nearly $320 million in cash and stock. As a result, the company slashed its annual earnings guidance due to rise in operating costs and issued shares related to the acquisition. Commenting on the deal, Chief Executive of Green Dot said: "From a financial perspective, we expect the transaction to generate mid-teens percentage accretion to 2015 non-GAAP earnings per share. Furthermore, the transaction is expected to expand Green Dot's margins thereby enabling Green Dot to generate higher and more diversified earnings. Additionally, TPG's robust cash flow model is expected to augment Green Dot's already strong annual cash flows." For the fiscal year 2014, the company now forecasts non-GAAP earnings per share to range between $1.25 - $1.29, down from the prior forecast of $1.37 - $1.41. The total non-GAAP operating revenues are expected to be between $610 million and $620 million, lower than the prior range of $640 million - $650 million. However, revenue forecast was not impacted by the TPG acquisition.

The transaction is expected to close within sixty days. BofA Merrill Lynch acted as financial advisor to Green Dot and Gibson Dunn & Crutcher LLP provided legal counsel.