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Intuit Closes $360M Check Inc. Acquisition

Zacks Equity Research

Intuit (INTU) has completed its $360 million acquisition of Check Inc., a mobile bill payment start-up. The company inked the deal on May 27. Check will be integrated into Intuit’s Consumer Ecosystem Group.

Following this acquisition, Intuit customers will be able to download Check’s app on their smartphones to pay their bills in addition to obtaining bill details, tracking transactions and making scheduled payments. Check’s solution is expected to be integrated into Intuit’s desktop finance management software, Quicken, and online checkbook, Mint.

Thus, the current acquisition will help Intuit to provide value added services to its customers such as bill payment options, thereby enhancing customer experience and expanding its customer base.

The Check acquisition is expected to bode well for Intuit as increasing adoption of smartphones and other mobile devices has paved the way for mobile commerce.

Check’s app has 10 million registered users. The app can be downloaded from Google’s (GOOGL) Play Store and Apple’s (AAPL) iTunes stores for free, while Check generates revenues through in-app ads.

Intuit has been active on the acquisition front of late, with the intention to diversify its offerings and expand its markets. The most recent addition to its portfolio, Lettuce, (acquisition value $30.0 million) is an online inventory and order management app. The company’s strong cash balance ($2.63 billion) and robust cash flow ($1.53 billion in third-quarter 2014) enable the company to engage in strategic acquisitions.

We are positive about Intuit’s growing small & medium business exposure and believe that all its acquisitions in the space, including Demandforce, Prestwick Services, LLC and Docstoc will continue to support the segment.

However, competition from leading payroll solution provider Paychex Inc. (PAYX) and H&R Block, Inc., seasonality of Intuit’s tax business and ongoing uncertainty in the economy are concerns.

Currently, Intuit has a Zacks Rank #3 (Hold).

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