BELLEVUE, Wash. (AP) — InfoSpace Inc. is buying online tax-preparation provider TaxACT for $287.5 million in cash, the online search company said Monday.
News of the acquisition comes a little less than two months after H&R Block Inc. formally dropped its $287.5 million bid for TaxACT after a federal judge thwarted the deal over antitrust concerns. H&R Block, the nation's biggest tax preparer, initially announced that it planned to buy the company in October 2010.
InfoSpace, which is based in Bellevue, Wash., plans to fund its acquisition of TaxACT with available cash and debt. It also has a secured commitment for about $95 million of financing in connection with the deal.
Shares of InfoSpace gained 32 cents, or 2.9 percent, to $11.35 in midday trading. The stock hit a fresh 52-week high of $11.95 earlier in the session.
"As a leading brand with a loyal, growing customer base and a sustained track record, TaxACT is well positioned to grow in the large and enduring tax preparation category," InfoSpace President and CEO William Ruckelshaus said in a statement.
TaxACT, based in Cedar Rapids, Iowa, had revenue of $78.1 million for the year ended Sept. 30, 2011. The privately held company had more than 5 million tax filers last season, with the majority filing online.
Once the buyout closes, 2nd Story Software, the operating company for TaxACT, will become a wholly owned subsidiary of InfoSpace. It will continue operations in Cedar Rapids as a stand-alone division led by TaxACT.
TaxACT's majority shareholder, TA Associates, will sell its full holdings as part of the acquisition.
The deal, which is anticipated to close during the first quarter, is expected to immediately add to InfoSpace's earnings per share.
