Yodlee, Inc. (YDLE) Spikes on Announcement of Buyout by Envestnet
Shares of Redwood City, California, based Yodlee, Inc. (YDLE) rose sharply on Tuesday, against the backrop of a down day in stocks overall. Yodlee's stock was up 28.57%, rising $3.60 per share, to close at $16.20 on volume of 3,447,118 shares. It was announced that wealth management technology company Envestnet (ENV) will acquire Yodlee later this year in a deal valued at more than $600 million.
On Monday, it was announced the the buyout of Yodlee, Inc. by Envestnet, Inc. was approved by the Boards of Directors of both companies. Envestnet will acquire all of the shares of Yodlee in a cash and stock transaction valued at $18.88 per share, and $660 million overall. The transaction will complete in either the fourth quarter of 2015, or early in 2016, and will be subject to approval by Yodlee's shareholders. Under the buyout agreement, Yodlee Chief Executive Officer Anil Arora will become Vice Chairman of the combined companies board of directors and CEO of the Yodlee subsidiary.
Founded in 1999, and based in Chicago, Illinois, Envestnet, Inc. (ENV) provides integrated portfolio, wealth management technology, practice management and reporting solutions to financial advisors and institutions. Its web-based platform, Tamarac, helps to unify portfolio management, modeling, rebalancing, trading, billing and reporting with a client portal and enterprise-level client relationship management system. The company's stock trades on the NYSE.
On Tuesday, it's stock closed down significantly on the news of the buyout of Yodlee. Shares of Envestnet stock lost $15.83 per share, down 35%, to close at $29.38 per share on volume of 5,536,923 shares. The decline comes despite the fact that Envestnet reported on Monday that it had a 21% increase in revenues and a 33% increase in earnings for the second quarter. Investors obviously thought that the good news on the earnings front was more than offset by the Yodlee buyout.
Said Envestnet Chief Executive Officer Jud Bergman, "Ultimately, the analytics that come from data of the tens of thousands of advisors that we have and the millions of accounts that those advisors represent, combined with a network of 20 million paid users for Yodlee's financial aggregation capability, was a much better profile to own the technology in a merged entity than it was to share the technology through a commercial arrangement, an arm's length commercial arrangement."
In related news, Lousiana based law firm Kahn Swick & Foti, along with several other law firms, announced that it is launching an investigation of the proposed buyout, to dermine if the amount paid to Yodlee stockholders is adequate.
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