Envestnet announced Monday that it will acquire Yodlee, a financial data aggregation company, in a cash and stock transaction worth $660 million.
Yodlee was founded in 1999 and has since built a network of more than 14,000 data sources providing information to 20 million paid users and 850 financial institutions, according to a press release. Yodlee generated $98.6 million in revenue during a 12 month period that ended June 30, and the acquisition values the company at $590 million, net of cash.
Jud Bergman, chairman and CEO of Envestnet, said the partnership will help advisors access and make sense out of disparate financial data, helping them make better decisions for their clients.
“We believe this represents a quantum leap in accuracy and knowledge that will deliver better outcomes to improve the financial health of investors,” Bergman said in a statement, adding that it could lead to more customer engagement and “substantial opportunities for revenue synergies.”
One of those synergies could be Yodlee’s side-business of selling the consumer data it gathers from its various banking tools to financial firms.
“The core of every financial transaction and every financial decision is data,” said Bill Crager, the president of Envestnet. “Financial institutions, advisors and investment managers using the Envestnet platform will be able to provide a more interactive and informative digital advice experience for clients, powered by an expanding array of data mining and predictive analytical tools.”
According to a recent story in the Wall Street Journal, Yodlee did not publicly disclose this practice of selling transaction data. Yodlee denied this.
The transaction is expected to close in either the fourth quarter of 2015 or in the first quarter of 2016.
For a quick primer on what Yodlee does, this is from the firm's S1 filed last year with the SEC ahead of its own IPO:
