Bendigo and Adelaide Bank will pay up to $116 million for Ferocia, the Melbourne-based fintech that underpins its banking app and is a joint partner in neobank Up.
The bank said in a slide deck that it would purchase 100 percent of Ferocia’s shares for up to $116 million in shares.
The total purchase price is “subject to five-year earnout hurdles” and is “contingent on future performance.”
The acquisition includes outsourced software services for Bendigo’s eBanking app, Ferocia’s 50 percent ownership of Up, “all intellectual property and the Ferocia team”.
The transaction is expected to settle by Q2 in FY22, subject to meeting certain conditions.
Bendigo and Adelaide Bank said there was a strong rationale for bringing Ferocia in-house, and that it would enable the bank to “accelerate [its] transformation program and digital banking strategy”.
The two firms have worked together for the past nine years.
Bendigo and Adelaide Bank has previously said it saw the Up neobank partially as a testbed for digital technologies and functions that may have broader applications within the group.
Those applications will now have a much smoother path into the broader group as Ferocia comes in-house.
"The acquisition brings outstanding digital and technical expertise to the bank, internalising Ferocia's market-leading digital capability and consolidating ownership of Up," Bendigo and Adelaide Bank managing director Marnie Baker told investors.
"Up was already supported by the bank's core infrastructure so there is no time lost on integration activities - all investment can go into further developing and building out the customer experience.
"The acquisition will allow Bendigo and Adelaide bank to grow and advance the Up platform, further develop its digital ecosystem adding Up's exciting product roadmap to the existing offerings provided by the bank."
The bank reported a statutory net profit after tax of $524 million for FY21, 171 percent up on the previous year.