Green Dot said to be in talks to buy Russell Simmons' UniRush
The prepaid card provider Green Dot Corp. is in talks to buy UniRush, a smaller competitor co-founded by Russell Simmons, the music industry entrepreneur behind the rap label Def Jam, according to people familiar with the matter.
Green Dot has entered into exclusive negotiations with UniRush after an auction for the company, said the people, who asked not to be identified because the process is private. A deal hasn't been finalized and the talks could fall apart, they said.
UniRush, which is backed by the private equity firm Carlyle Group LP, is worth about $150 million, one of the people said. The company began working with William Blair & Co. to explore a sale late last year, the people said, months after agreeing to settle a lawsuit from holders of its RushCard who temporarily lost access to their money due to a system glitch.
Representatives for Green Dot, Carlyle and William Blair declined to comment.
Green Dot, which has a market value of about $1.3 billion, is the largest provider of prepaid debit cards by volume in the U.S., thanks to distribution deals with Wal-Mart Stores Inc., Walgreens Boots Alliance Inc. and other retailers, according to its most recent annual report. The Pasadena, Calif., company also offers mobile banking services and provides standard debit cards.
Green Dot had a glitch similar to UniRush's last year, around the same time that Green Dot agreed to replace some board members and split the roles of chairman and chief executive officer after a proxy fight with its largest shareholder. The companies cater to people lacking bank accounts or credit cards, a competitive and lightly regulated market.