Intuit, creator of the popular Quicken finance software, said Tuesday that it has agreed to acquire privately held Tax and Accounting Software Corp. (TAASC), which provides a collection of applications for accounting and tax professionals. The acquisition is being made by Intuit's Lacerte Software subsidiary and is expected to close by the end of the day Tuesday.
The deal is worth $63 million in cash, said a spokesman for Intuit.
Under the agreement, Intuit said it plans to fold TAASC's operations into its Dallas-based professional tax division. Operations at TAASC's Tulsa, Okla., headquarters will be scaled back, with Intuit offering regular or temporary employment to approximately 100 of TAASC's 350 employees. TAASC said it intends to provide all its employees, including those who accept jobs with Intuit, at least 60 days of severance.
Intuit, based in Mountain View, Calif., said it will provide outplacement assistance to TAASC employees who are not offered jobs with Intuit.
Tim Redmond, TAASC's executive vice president, plans to join Intuit's professional tax division and will help manage the transition
The news comes at the end of tax season, a stressful and even frantic time for many, especially those who end up having to pay Uncle Sam when all is said and done.
For some Intuit customers, that stress spiked last month when Intuit, which also runs its own tax-preparation Web site, suffered a brief technology crunch. Intuit's online tax-filing system, which lets people send tax forms directly to the Internal Revenue Service over the Web, was inaccessible for several hours.
For the most part, however, top tax-preparation sites crunched numbers relatively smoothly during the crucial week before the U.S. tax-filing deadline after several heavy-traffic incidents earlier this year.
A recent study noted that customers of tax sites such as Hrblock.com, Intuit's Quicken.com and Tax Web had been able to download the sites 98 percent of the time during the week approaching the April 16 income tax deadline. According to the study, conducted by Internet traffic watcher Keynote Systems, the largest tax-preparation sites took about 1.64 seconds to download, a fairly strong number given the volume during that critical time.
With the acquisition of TAASC, Intuit said it will add TAASC's accounting products--software that allows accountants to prepare financial statements and forms--to its existing line of Lacerte and ProSeries financial software. Eventually, Intuit intends to integrate the applications into future versions of Lacerte and ProSeries, which houses Intuit's corporate tax-preparation software.
The company said its outlook for fiscal 2001 assumed completion of the TAASC deal during the second half of this fiscal year. In March, the company warned that third-quarter revenue would be lower than expected, partly because of sluggish sales of its QuickBooks desktop software.
Intuit said it expects third-quarter revenue to be in the range of $425 million to $450 million, and revenue for its full fiscal year to be between $1.26 billion and $1.3 billion.