Three Firms Help Cinven Buy TaxAct From Blucora for $720 Million

Ropes & Gray is advising Cinven on the private equity firm’s agreement to acquire TaxAct, a provider of do-it-yourself tax-filing software and services, for around $720 million.

Haynes and Boone and Sidley Austin are counseling the seller, Dallas-based Blucora Inc., on the transaction, which is expected to close before year’s end, Nasdaq-listed Blucora said in a statement.

TaxAct says more than 85 million individual filers have used its DIY software since the company was founded in 1998, and it claims to be the first online software provider to offer free tax filing services.

Cinven said it plans to combine TaxAct with its existing portfolio company, Drake Software, a provider of comprehensive professional tax-preparation software used by more than 70,000 US tax offices. The businesses will continue to operate under their own brands within the holding company, keeping their current leaders.

Blucora said it expects to reap after-tax net cash proceeds of approximately $620 million from the transaction. It plans to use the proceeds to pay down its debt and return capital to shareholders. The company plans to rebrand as Avantax, a pure-play provider of tax-focused wealth-management solutions.

Ropes said its team advising Cinven was led by mergers and acquisitions partners Sarah Young and Christopher Comeau, among others. Haynes and Boone said its team advising Blucora was led by Denver partner Dan Malone. Sidley said its team for Blucora was led by M&A partners Beth E. Berg, Scott R. Williams, and senior managing associate Jessica M. Day, with global finance partner Kelly Dybala, among others.