Intuit, Chipsoft Agree to Merge in $225-Million Deal
The nation’s leading makers of personal finance and tax-preparation software, both based in California, announced late Wednesday that they have agreed to merge in a deal valued at $225 million.
Intuit Inc., whose popular Quicken software helps users automate their bill paying, and Chipsoft Inc., the maker of TurboTax and MacInTax software for preparing tax returns, said holders of Chipsoft shares would swap them for about 7.25 million shares of Intuit stock, equal to about 39% of the merged company.
If the deal, announced after the stock markets had closed, wins shareholder approval, San Diego-based Chipsoft will become a wholly owned subsidiary of Intuit, which has headquarters in Menlo Park. The market value of the combined company will be about $600 million.
“These are two very strong companies who are surviving and thriving wonderfully,” said Scott Cook, Intuit president and chief executive. “There are no weak sisters here.”
Intuit, which markets to individuals and businesses, is in line to post $110 million in sales in its current fiscal year, which ends Sept. 30. Chipsoft, with more than 325 tax-preparation products for professionals and consumers, reported $70 million in sales for the year ended June 30.
Both companies, Cook noted, are quite profitable and have loyal customers who routinely buy updated versions, services and supplies to augment their software--a situation he said is unusual in the business.
In June, the U.S. Justice Department cited antitrust concerns when it squashed a Chipsoft effort to buy Meca Software Inc., its chief rival in tax-preparation software, for $58 million in cash.
Cook indicated that he expects no such trouble with this deal, saying, “We have no competing products.”