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Intuit To Sell Financial Services Unit To Thoma Bravo; Healthcare Unit On Block


Accounting software maker Intuit, Inc. (INTU) agreed Monday to sell its financial services business to private equity investment firm Thoma Bravo, LLC in an-all-cash deal valued at about $1.025 billion. The deal, subject to regulatory review, is expected to close over the next few months.

The company will retain OFX connectivity and Mint.com. However, it now plans to divest healthcare business and to realign its accountant business.

"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, managing partner at Thoma Bravo.

Mountain View, California-based Intuit, which makes software like QuickBooks and TurboTax to file taxes, said Intuit financial services has 730 employees in several offices in the U.S. and India.

For Thoma Bravo, the deal will help it gain access to one of the best integrated digital banking platform and innovative mobile solution along a richly talented team.

The deal will result in a stand-alone company focused on providing a digital banking platform and market-leading mobile solutions to financial institutions.

Meanwhile, the deal will help Intuit in sharpening its focus on directly serving small businesses and consumer tax, and continuing to build its durable competitive advantage in those segments.

The deal will include Internet banking platform, digital payments, mobile banking, Purchase Rewards, FinanceWorks, and digital banking add-on solutions as well as third-party solutions, which together contributed about $305 million in revenues in fiscal 2012, and is projected to contribute revenue of approximately $325 million in fiscal 2013.

However, the deal will exclude OFX connectivity and Mint.com, which are both currently a part of the Intuit financial services division. The company noted that Mint.com will now become part of the consumer ecosystem business unit that includes other consumer products such as Quicken.

Intuit said it intends to use the proceeds from the deal to accelerate share repurchases. The company also expects to classify Intuit Financial Services as discontinued operations.

Thoma Bravo invests across multiple industries, with a particular focus on application and infrastructure software and financial and business services. It has already invested in 26 software companies that have completed 60 add-on acquisitions to produce total annual earnings of approximately $1 billion.

Additionally, Intuit also put its healthcare business for sale and realigned its accountant business to accelerate global connected services strategy as part of its next phase of structural moves in its quest to build a strong foundation for future growth and to focus more sharply on its core businesses.

Intuit noted that its healthcare business no longer fits within its refocused strategy, while the assets will be a better fit for an organization with a stronger focus on the healthcare industry.

"These decisions are the remaining foundational pieces that focus our organization on our biggest opportunities as we execute our global connected services strategy," Intuit President and CEO Brad Smith noted.

Intuit said it expects to classify both financial services business and the healthcare businesses as discontinued operations. Both these businesses contributed about $320 million in revenues in fiscal 2012, and is projected to contribute revenue of about $325 million in fiscal 2013.

In Monday's regular trading session, INTU is currently trading at $63.61, up $2.57 or 4.21% on a volume of 1.37 million shares. In the past 52-week period, the stock has been trading in a range of $55.54 to $68.41.

by RTTNews Staff Writer

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