Digital business bank Grasshopper to buy ACG’s Auto Club Trust
New York-headquartered digital commercial bank Grasshopper is set to acquire Auto Club Trust, the federally chartered savings bank subsidiary of The Auto Club Group (ACG) and Insurance Association.
Grasshopper inks merger deal with Auto Club Trust
Through the proposed merger agreement, Grasshopper will become the exclusive provider of “certain depository and lending services” for ACG, according to a statement.
Grasshopper chairman and CEO Michael Butler confirms that the bank’s remit to ACG will be expanded “over time”.
ACG currently services 14 US states, providing membership, property and casualty insurance, life insurance, and financial services, making it the second largest AAA Club in North America.
As part of the cash and stock transaction, Grasshopper will have to raise approximately $35 million in new equity and will hand ACG a 4.9% ownership stake.
Grasshopper previously raised $30.4 million through a funding round closed in August 2022.
Both companies’ boards have approved the transaction, which is expected to close in H1 2025, subject to closing conditions.
Once completed, the combined entity will boast approximately $1.4 billion in assets, comprising of $495 million from Auto Club Trust, and $835 million from Grasshopper.
