Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

A chartered management accountant with more than 10 years of rich experience in investment research and financial analysis. Worked as an equity analyst for one of the world's largest asset managers with USD2.5trn in AUM covering numerous sectors including chemicals, retail, tech, autos, telco, real-estate and banks, globally. Experienced in fundamental equity research, industry research, commodity studies, forensic accounting, and due diligence reviews.

Equity Analyst

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LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<ul>
<li>It was announced by Visa on Monday (13<sup>th</sup> January) that it has signed a definitive agreement to acquire the fintech startup Plaid for a total purchase consideration of US$5.3bn.</li>
<li>Visa expects the transaction to close over the next 3-6 months and it is subject to regulatory approvals and other customary closing conditions.</li>
<li>Plaid offers an API software which helps start-ups to connect with user’s bank accounts. It helps users conveniently share their financial information with apps and services. For example, when a user sets up a Venmo account, it is Plaid that enables the user to link their bank account to their Venmo account.</li>
<li>Visa will be paying US$4.9bn through cash while the remaining US$400m will be paid through retention equity and deferred equity consideration in the form of restricted stock units (RSU) of Visa.</li>
<li>According to Forbes, Plaid made revenues in the range of US$100-200m in 2019, which implies an EV/Sales of 26.5-53x. In April 2019, KKR acquired MYOB for around AU$1.6bn at an implied sales multiple of 5.6x and we believe Visa’s multiple for Plaid makes it one of the highest multiples in the industry.</li>
<li>We believe the acquisition will help Visa to cross-sell its existing products to Plaid’s large fintech customer base while Visa’s global presence and network should help Plaid expand globally.</li>
</ul>


It was announced by Visa on Monday (13th January) that it has signed a definitive agreement to acquire the fintech startup Plaid for a total purchase consideration of US$5.3bn.
Visa expects the transaction to close over the next 3-6 months and it is subject to regulatory approvals and other customary closing conditions.
Plaid offers an API software which helps start-ups to connect with user’s bank accounts. It helps users conveniently share their financial information with apps and services. For example, when a user sets up a Venmo account, it is Plaid that enables the user to link their bank account to their Venmo account.
Visa will be paying US$4.9bn through cash while the remaining US$400m will be paid through retention equity and deferred equity consideration in the form of restricted stock units (RSU) of Visa.
According to Forbes, Plaid made revenues in the range of US$100-200m in 2019, which implies an EV/Sales of 26.5-53x. In April 2019, KKR acquired MYOB for around AU$1.6bn at an implied sales multiple of 5.6x and we believe Visa’s multiple for Plaid makes it one of the highest multiples in the industry.
We believe the acquisition will help Visa to cross-sell its existing products to Plaid’s large fintech customer base while Visa’s global presence and network should help Plaid expand globally.


Visa to Buy Fintech Startup Plaid for US$5.3bn