Cinven has agreed to make a “significant” investment in Franklin, North Carolina-based Drake Software, a provider of software for tax preparers. No financial terms were disclosed. Deloitte Corporate Finance LLC acted as financial advisor to Drake Software.
International private equity firm, Cinven, today announces that it has agreed to make a significant investment into Drake Software (‘Drake’ or ‘the company’), a provider of software for tax preparers. Financial details of the transaction are not being disclosed.
Headquartered in Franklin, North Carolina, Drake is a leading provider of professional tax preparation software. It provides the tools and resources that tax professionals need to build their businesses and attract new clients. Drake employs more than 600 people across five offices in North Carolina, Tennessee and Virginia. More than 64,000 tax professionals nationwide use Drake, and each year the company processes more than 33 million federal and state-accepted returns. The business was established in 1977 by founder Phil Drake.
Building on its successful investment in Visma, a provider of Enterprise Resource Planning software and services – including accounting, tax and payroll applications – Cinven’s Technology, Media and Telecom (‘TMT’) Sector team worked closely with its US team to identify Drake as an attractive investment opportunity, given:
· The resilience and stability of the professional tax preparation market;
· Drake’s best-in-class reputation with its customers, evidenced by its market-leading customer retention rates and high recurring revenues;
· Its market leading position, with the opportunity for further organic and acquisitive growth; and
· The quality and breadth of the company’s software, with recent success in cross-selling new products and opportunities for the introduction of add-on products.
Cinven will be working with the highly experienced Drake management team, with Jamie Stiles continuing in his role as President and Chief Executive Officer of Drake Software.
Chris Good, Partner at Cinven, commented:
“This is a truly outstanding opportunity for Cinven to invest behind a team that has not only built a product that is loved by its customers, but also has a well-established position in a stable market with a wide range of exciting growth prospects.”
“We believe Cinven is well positioned to support the company through its next stage of growth, especially given its track record of investing successfully in technology-focused companies such as Visma and Jaggaer.”
Daniel Garin, Principal at Cinven, said:
“We are delighted to have the chance to work with Jamie and the Drake management team. We plan to invest behind the company’s growth plans to expand Drake’s presence in the market, renew its technology platform, and enhance its product offerings for the benefit of Drake’s employees and customers.”
Cinven’s investment in Drake builds on its successful track record in TMT, following its realisations of: Visma, a leading business solutions provider, in May 2019; Ufinet Group, a provider of fibre infrastructure and transmission services to telecom operators, in July 2018; and HEG, a provider of hosting and domain services, in April 2017.
Alongside these realisations, Cinven has continued to actively invest in the sector, most recently acquiring: MasMovil, a Spanish telecommunications operator; Jaggaer, a global provider of procurement software for large and medium-sized enterprises; RTB House, a global digital advertising technology provider; and One.com, a leading European web hosting provider.
The transaction is subject to customary anti-trust approvals.
Ropes & Gray LLP provided legal advice to Cinven on the transaction.
Chambliss, Bahner & Stophel, P.C. provided legal advice to Drake Software.
Deloitte Corporate Finance LLC acted as financial advisor to Drake Software.
Cinven is a leading international private equity firm focused on building world-class global 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 Partners LLP, 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, Cinven (LuxCo1) S.A., and their respective Associates (as defined in the Companies Act 2006) and/or funds managed or advised by any of the foregoing.
For additional information on Cinven please visit www.cinven.com and www.linkedin.com/company/cinven/.
About Drake Software
Drake Software, based in Franklin, North Carolina, is a top-tier provider of professional tax preparation software. Drake provides the tools and support tax professionals need to build their businesses and attract new clients. Our customers know they can rely on Drake for comprehensive product excellence and value.
More than 64,000 tax professionals nationwide use Drake. Each year, Drake processes more than 33 million federal and state accepted returns.
For additional information on Drake Software please visit www.drakesoftware.com.