Cinven to buy tax prep software provider TaxAct for $720m

When the deal closes, Cinven will merge TaxAct with portfolio company Drake Software under a single holding company.

  • Dom Morea will remain president and CEO of Drake Software and Curtis Campbell will continue to lead the TaxAct business
  • The transaction is expected to close before the end of 2022
  • Evercore, J.P. Morgan and Ropes & Gray LLP advised Cinven on the transaction

Cinven has agreed to acquire Cedar Rapids, Iowa-based TaxAct, a tax preparation software firm, for about $720 million. When the deal closes, Cinven will merge TaxAct with portfolio company Drake Software under a single holding company.

Since its inception in 1998, TaxAct has provided DIY tax filing services to more than 85 million individual filers to date.

Founded in 1977, Drake Software is a provider of professional tax preparation software, servicing more than 70,000 tax offices throughout the U.S. In 2021, Cinven made a significant investment in Drake.

On the deal, Chris Good, a partner at Cinven, said in a statement, “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.”

Upon the close of the transaction, Dom Morea will remain president and CEO 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.

Evercore, J.P. Morgan, and Ropes & Gray LLP advised Cinven on the transaction.