Cinven acquires TaxAct for $720M
London-based private equity firm Cinven has agreed to acquire tax preparation software company TaxAct in a deal valued at around $720 million.
Why it matters: The deal further consolidates the U.S. tax prep market, which is already suffering from a lack of competition.
What's next: Once the deal closes, Cinven will combine TaxAct's business with Drake Software, another tax preparation software company the PE firm invested in early last year, under a single holding company.
- Both firms will continue to operate under their own brands within the holding company, with Drake Software president and CEO Dom Morea and TaxAct's Curtis Campbell each leading those businesses.
State of play: TaxAct primarily serves the do-it-yourself market, while Drake Software's products and services are aimed at professional tax preparation firms.
- According to Cinven, more than 85 million people have used TaxAct to file their taxes, while more than 70,000 tax offices use Drake's software.
The intrigue: When Intuit agreed to acquire Credit Karma in 2020, the firm was forced to divest its tax unit over antitrust concerns.
- However, Cinven expects the deal to close before the end of the year, pending regulatory approvals and closing conditions.