Cinven to Acquire TaxAct
November 1, 2022
Cinven will bring TaxAct and Drake Software, a Cinven portfolio company, together over time under a new holding company, creating a leading, full-service tax solutions provider for professionals and consumers.
LONDON, November 1, 2022 – International private equity firm, Cinven, today announces that it has reached an agreement to acquire TaxAct for approximately $720 million. Following closing of the transaction, Cinven will bring the business together with existing portfolio company Drake Software (“Drake” or the “Company”) under a single holding company. This will create a full-service tax ecosystem provider with the scope to use the resources and shared principles of the combined businesses to innovate and support their complementary professional tax preparer and individual tax filer customer bases.
TaxAct is one of the leading providers of digital, do-it-yourself (“DIY”) tax filing assistance software and services, operating in a fast growing subset of the U.S. tax preparation services market. Since it was founded in 1998, TaxAct has grown rapidly, providing DIY tax filing services to more than 85 million individual filers to date, and was the first online software provider to offer free tax filing services.
With a 45-year track record of best-in-class products and services, Drake Software is a leading provider of comprehensive professional tax preparation software, servicing more than 70,000 tax offices throughout the U.S. In 2021, Cinven made a significant investment in Drake to support the next stage of the Company’s growth.
Chris Good, Partner at Cinven, commented:
“Since investing in Drake in 2021, Cinven has set out to support the Company’s growth plans, including expanding its presence in the professional tax preparation market, renewing its technology platform and enhancing its product offerings for the benefit of Drake’s tax professional customers. The addition of TaxAct’s consumer tax preparation platform will further strengthen Drake’s capabilities to anticipate and serve the needs of all types of customers as today’s tax landscape becomes increasingly sophisticated. This transaction exemplifies Cinven’s track record of working with companies to support their growth and capability expansion strategies, creating better products for customers and increasing opportunities for employees.”
Daniel Garin, Senior Principal at Cinven, added:
“Cinven has followed TaxAct for many years. This acquisition allows Cinven to back two leading management teams, building a stronger combined company that can win in an attractive market with substantial potential for future growth. We are excited to bring together two industry-leading, complementary businesses with shared values and a collective vision for delighting customers through product innovation and exceptional customer service. This investment builds on Cinven’s strong track record in the TMT sector in North America and is continued evidence of Cinven successfully deploying its sector-country matrix to originate attractive investment opportunities.”
Upon the close of the transaction, Dom Morea will remain President and Chief Executive Officer of Drake Software and Curtis Campbell will continue to lead the TaxAct business. The businesses will continue to operate under their own brands within the holding company.
The transaction is expected to close before the end of 2022, subject to regulatory approvals and other customary closing conditions.
Advisers to Cinven on the transaction included: Evercore, J.P. Morgan, and Ropes & Gray LLP.
Clare Bradshaw Tel. +44 (0)7881 918 967
Joele Frank (Advisers to Cinven)
Jon Keehner / Woomi Yun / Erik Carlson Tel. +1 212-355-4449
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Cinven is a leading international private equity firm focused on building world-class global and European companies. Its funds invest in six key sectors: Business Services, Consumer, Financial Services, Healthcare, Industrials and Technology, Media and Telecommunications (TMT). Cinven has offices in London, New York, Frankfurt, Paris, Milan, Madrid, Guernsey and Luxembourg.
Cinven takes a responsible approach towards its portfolio companies, their employees, suppliers, local communities, the environment and society.
Cinven Capital Management (V) General Partner Limited, Cinven Capital Management (VI) General Partner Limited, Cinven Capital Management (VII) General Partner Limited and Cinven Capital Management (SFF) General Partner Limited are each authorised and regulated by the Guernsey Financial Services Commission, and Cinven Limited, the advisor to the Cinven Funds, is authorised and regulated by the Financial Conduct Authority.
In this press release ‘Cinven’ means, depending on the context, any of or collectively, Cinven Holdings Guernsey Limited, Cinven Partnership LLP, and their respective Associates (as defined in the Companies Act 2006) and/or funds managed or advised by any of the foregoing.
About Drake Software
Drake Software, a private company founded in 1977, provides software solutions to more than 70,000 tax and accounting firms that file more than 40 million tax returns every year. Known for its award-winning customer service team, Drake is also consistently recognized for excellence in quality, value, and reliability. As part of its commitment to innovation and customer success, the company has continued to expand product offerings, integrations, and customer-service efforts, more than doubling its customer base over the past decade.