Private Equity Firm Acquires Intuit’s Financial Services Unit

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Intuit, the company that provides tax preparation software, TurboTax to financial institutions, has planned to sell of its financial services unit. The financial services unit was responsible for providing online and banking software to institutions. The company claims that it plans to focus on its core-competencies and that is tax-preparation software business. Intuit sold the unit for around $1.03 billion to Thoma Bravo, a private equity firm. With this cash the company believes to by back its shares and regain more control of its company. The transaction is said to be finalized within the next few months.

Thoma Bravo

“Thoma Bravo is gaining a richly talented team that has created an enviable integrated digital banking platform and innovative mobile solution, recognized as the best in the market. Intuit will sharpen its focus on directly serving consumers and small businesses, and continuing to build our durable competitive advantage in those segments.” Brad Smith, Intuit president and chief executive officer commented.

Thoma Bravo’s acquisition of IFS is consistent with our strategy of buying great technology franchises with significant recurring revenue, we look forward to accelerating the company’s growth as an independent business through our buy-and-build principles. said Orlando Bravo who is a managing partner at Thoma Bravo.

Focusing on Core Values

This deal when completed will help Intuit to refocus on providing  a digital banking platform and market-leading mobile solutions to financial institutions. Intuit will be done away with an internet banking platform, digital payments, mobile banking, purchase Rewards, FinanceWorks, and digital banking add-on solutions. Intuit specializes in providing financial management solutions for small and mid-sized businesses.

Thoma Bravo has been providing equity and strategic support to experienced management teams and growing companies. It invests across multiple industries, with a particular focus on application and infrastructure software and financial and business services. The firm currently manages a series of private equity funds representing almost $4 billion of equity commitments. In software, Thoma Bravo has invested in 26 companies that have completed 60 add-on acquisitions to produce total annual earnings of approximately $1 billion.

The shift in strategy will help Intuit focus on its base of individuals and small businesses alike. Mint.com, currently a part of IFS, will stay with Intuit and form part of the Consumer Ecosystem business. The transaction is expected to close in the coming few months, though a specific deadline was not given. The deal may be subject to regulatory review, the statement noted.

A change in strategy

“IFS is the premier provider of online and mobile banking software to financial institutions, markets which should continue to see secular growth and further end-user adoption. Thoma Bravo will continue to support the company’s mission of providing best-in-class products to support its large base of customers and end users.”  a partner at Thoma Bravo, Holden Spaht, said regarding the deal to go through. Intuit sees this deal as not laying off an ailing business unit. Instead it believes that this move will help it align its core business strategy, make it flexible and responsive to the changes and uncertainties of the market. The market is an agile and flexible one and any business that is slow to respond to change stands to lose a lot in the near future.

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Usama Batavia

Usama Batavia is an experienced Freelancer in the field of technical and creative writing. He is also a Social Media Expert. With love and devotion towards the world of technology, he has been writing for The Tech Articles ever since and has never looked back.

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