Meta Financial in Sioux Falls, S.D., has agreed to buy most of the assets and liabilities for a company that handles transactions for tax preparers.
The $3.1 billion-asset Meta said in a press release Monday that it will pay $42.5 million to Drake Enterprises for EPS Financial. The deal is expected to close by the end of this year.
The EPS team will join MetaBank and remain based in Easton, Pa. The firms services include refund-settlement products, prepaid payroll card solutions and merchant services.
Meta said it expects the deal to provide more than 10% accretion to it earnings per share in the first full year. It should take about four years to earn back the deal's 12% dilution to Meta's tangible book value, though certain efficiencies could shorten that period.
"This acquisition will further Meta's competitive positioning in the tax payments industry," J. Tyler Haahr, Meta's chairman and chief executive, said in the release. "Over time Meta will assume certain services provided by others to EPS and make available other Meta products and services to tax preparers and their customers, which should further enhance the economic benefits from this transaction."
MetaBank was advised by Sandler O'Neill and Katten Muchin Rosenman. Drake Enterprises was advised by Deloitte Corporate Finance and Chambliss, Bahner & Stophel.