Financial-technology firm BM Technologies Inc. is turning the typical banking tie-up formula on its head with plans to acquire First Sound Bank, a Seattle-based community business lender.
BM Technologies agreed to acquire First Sound for as much as $7.22 a share in a deal valued at $23 million, the Radnor, Pennsylvania-based firm said Monday in a statement. The acquisition will allow BM Technologies to move deposit accounts onto First Sound’s balance sheet and partner with other fintechs. The new company will operate under the name BMTX Bank.
“BMTX Bank expects to add direct to consumer and small-business operations, marketplace lending, robo-advisory and blockchain-based payment systems to sustain our competitive advantage,” Luvleen Sidhu, the BM Technologies founder and chief executive officer who is set to be the merged company’s CEO, said in the statement.
BM Technologies went public in January after being bought by blank check company Megalith Financial Acquisition. Its deal for First Sound is unusual, as it’s more common for traditional banks to acquire fintechs.
The deal comes as financial firms strike deals meant to better compete with giants like JPMorgan Chase & Co. and Bank of America Corp., and as traditional banks partner with fintechs. According to S&P Global Market Intelligence, U.S. bank M&A deal value in 2021 has already surpassed 2019’s full-year level, making it the biggest year since 2007.
Wedbush Securities Inc. advised BM Technologies, while Stifel Financial Corp.’s Keefe, Bruyette & Woods acted as First Sound’s adviser.
By Max Reyes (Bloomberg Mercury)