Curreen Capital Partners, LP on Green Dot Corporation
Thesis
Curreen bought Green Dot as a merger-spinoff opportunity tied to its combination with CommerceOne Financial. The transaction would separate Green Dot's fintech operation while merging Green Dot Bank into CommerceOne. Curreen believed the combination could create a stronger bank by pairing Green Dot Bank's inexpensive deposit base with CommerceOne's profitable Alabama business-lending franchise. This combination could generate a high return on equity and potentially deserve a high multiple of book value, while Green Dot shares were available at an attractive price relative to that prospective value. The fund later exited after the merger failed to close within its anticipated timeframe, showing that the thesis was conditional on deal completion.
“The positives of the merger are that two high ROE banks that complement one another will combine, and this future bank is available at an attractive price.”
Key risks
- Regulatory approval and merger closing were uncertain.
- The value thesis could not be realized until the transaction was completed.
- The merger took materially longer than Curreen originally anticipated.