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Intuit Plunks Down $400 Million to Buy Lacerte
The consolidation of the tax preparation business took one of its last major steps in May as Intuit agreed to buy Lacerte Software for $400 million, amid pledges to continue to market both Lacerte's tax software and Intuit's ProSeries.
Intuit's purchase of Lacerte is being driven by two factors, according to Larry Wolfe, senior vice president of Intuit's tax products division: the need to compete toe-to-toe with CCH and the RIA Group, and the drive for greater profits.
The purchase "ensures that we retain a competitive position," says Wolfe. "RIA is considerably larger than the two companies (Intuit and Lacerte) on a revenue basis and CCH is roughly the same size as the two companies put together." The purchase, subject to regulatory approval, brings together two companies with about 70,000 professional tax customers, far outstripping CCH with about 16,000 professional tax licenses.
Wolfe's statements and a prospectus for an offering of 8.2 million shares of common stock, which raised $370 million of the $400 million in cash to buy Lacerte, show the impact of the deal as follows:
Intuit will operate Lacerte as a wholly owned subsidiary whose operations remain in Dallas.
Intuit's ProSeries and Lacerte Tax Software will be marketed as separate brands.
Intuit has no intentions of matching CCH and RIA group in putting together...