InfoSpace to Acquire TaxACT after DOJ Blocks H&R Block from Deal
Online metasearch product maker InfoSpace Inc. has signed a definitive agreement to acquire online tax product provider TaxACT for $287.5 million in cash after the Justice Department blocked H&R Block from buying the company.
Block had announced in October 2010 that it planned to acquire 2SS Holdings, which owns TaxACT developer 2nd Story Software, for the same amount (see H&R Block to Acquire TaxACT for $287.5M). But the Justice Department filed an antitrust lawsuit to prevent the acquisition, arguing that Block already owned the second most popular consumer tax prep product on the market, H&R Block At Home, formerly known as TaxCut (see DOJ Files Suit to Stop H&R Block from Buying TaxAct). TaxAct is the third most popular consumer tax prep software, with Intuit’s TurboTax leading the market. A federal judge agreed with the Justice Department last November and ruled against Block (see Judge Blocks H&R Block from Buying TaxACT).
The acquisition is subject to satisfaction of customary closing conditions and is expected to close in the first quarter of 2012. The transaction is expected to be immediately accretive to InfoSpace’s earnings per share. For the 12 months ending Sept. 30, 2011, TaxACT had revenues of $78.1 million and adjusted EBITDA of $37.8 million.
TaxACT has approximately 70 full-time employees and claims more than 5 million tax filers used its services last season, with the vast majority filing online.
“The acquisition of TaxACT is significant for our company, and consistent with our capital deployment objectives,” said InfoSpace president and chief executive William J. Ruckelshaus. “As a leading brand with a loyal, growing customer base and a sustained track record, TaxACT is well positioned to grow in the large and enduring tax preparation category. The financial benefits of this transaction are compelling and provide us ongoing flexibility to invest in our businesses to further enhance shareholder value.”
In addition, upon completion of the acquisition 2nd Story Software, the operating company for the TaxACT business, will become a wholly owned subsidiary of InfoSpace and will continue operations in Cedar Rapids, Iowa, as a standalone business unit led by the TaxACT management team. TA Associates, the majority shareholder of the TaxACT business, will sell its full holdings as part of the transaction.
- Global Ethics Code Playing Catch Up with Latest Technology Developments
- Regulator Launches an Inquiry into Operations of a Birmingham Based Charity
- Leading UK Furniture Business Collapses into Administration
- What You Need to Know About Forex Order Types
- How Technology is Shaping the Future of Financial Services for the Better
- ICAEW Signs MoU with ICAI
- Companies House Updates the Penalty Appeal Proceess for Late Filing