H.I.G. Bayside Capital has put the tax preparer Jackson Hewitt Inc up for sale, four sources said.
Jefferies and Piper Jaffray are advising on the process, two of the sources said.
Jackson Hewitt, Jersey City, New Jersey, provides tax-preparation services for mainly low-income customers. The company has about 6,000 franchised and company-owned locations, including 3,000 Wal-Mart stores.
How much Jackson Hewitt might fetch is unclear. Hewitt caters to subprime consumers and makes most of its money by putting customers onto prepaid debit cards, one of the sources said.
H&R Block, one of Jackson Hewitt’s main rivals, was rumored to be up for sale last year for $35 a share, or about $7.5 billion. Block currently has a $5.6 billion market cap.
In 2011, Jackson Hewitt filed for a prepackaged Chapter 11 bankruptcy. The company at the time listed assets of $388.6 million and debt of $444.8 million, Reuters said.
Bayside Capital, one of Hewitt’s lenders, took control of the tax preparer once it emerged from bankruptcy in 2011. Bayside had a 75 to 80 percent stake in the company, while Wells Fargo & Co and Bank of Ireland had the rest, Reuters said. It’s unclear whether Wells Fargo and Bank of Ireland still own their stakes.
In 2015, Jackson Hewitt paid out a $100 million dividend to its shareholders, according to Moody’s Investors Service. The company at the time had about 6,200 stores and locations. It was expected to generate about $230 million in 2016 revenue, Moody’s said.
Bayside is the special situations group at H.I.G. The group closed its fourth loan opportunity fund on $1.1 billion in 2016, Buyouts reported.
Executives for Jefferies and Wells Fargo declined comment. Hewitt, Piper Jaffray and Bayside could not be reached for comment.
Action Item: Call John Bolduc, head of Bayside Capital, at +1 305-379-8686
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