InfoSpace to buy TaxACT for $287.5 million
InfoSpace Inc. is buying online tax preparation services provider TaxACT for $287.5 million in cash, the online search company said on Monday.
"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," InfoSpace President and CEO William Ruckelshaus said in a statement.
InfoSpace, which is based in Bellevue, Wash., plans to fund the acquisition with available cash and debt. It also has a secured commitment for about $95 million of financing in connection with the deal.
TaxACT, based in Cedar Rapids, Iowa, had revenue of $78.1 million for the year ended Sept. 30, 2011. The privately-held company had more than 5 million tax filers last season, with the majority filing online.
Once the buyout closes, 2nd Story Software, the operating company for TaxACT, will become a wholly-owned subsidiary of InfoSpace. It will continue operations in Cedar Rapids as a stand-alone division led by TaxACT.
TaxACT's majority shareholder, TA Associates, will sell its full holdings as part of the acquisition.
The deal is expected to immediately add to InfoSpace's earnings per share.
The transaction is expected to close during the first quarter.