InfoSpace is buying online tax-preparation-services provider TaxACT for $287.5 million in cash almost two months after H&R Block formally dropped its bid when a federal judge thwarted the deal over antitrust concerns.
InfoSpace is buying online tax-preparation-services provider TaxACT for $287.5 million in cash, the online search company said Monday.
News of the acquisition comes almost two months after H&R Block formally dropped its $287.5 million bid when a federal judge thwarted the deal over antitrust concerns.
H&R Block, the nation’s biggest tax preparer, initially announced it planned to buy TaxACT in October 2010.
Bellevue-based InfoSpace 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.
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Shares of InfoSpace closed down 4 cents at $10.99 Monday, after rising 92 cents earlier in the session to a 52-week high of $11.95.
“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 CEO William Ruckelshaus said in a statement.
TaxACT, based in Cedar Rapids, Iowa, had revenue of $78.1 million for the year ended Sept. 30. 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, anticipated to close during the first quarter, is expected to immediately add to InfoSpace’s earnings per share.