Intuit Beats Estimates; Will Buy Software Firm for $400 Million
Intuit Inc. on Monday reported better-than-expected fiscal third-quarter earnings and said it has agreed to buy closely held Lacerte Software Corp. plus a related services company for $400 million in cash.
Intuit, maker of the popular Quicken personal finance software program, said it will conduct a public stock offering of 8.4 million shares of common stock to pay for the purchase. The offering is being managed by Deutsche Morgan Grenfell Inc. and Morgan Stanley, Dean Witter, Discover & Co.
The company is buying Dallas-based Lacerte for its professional tax-preparation software. Intuit, which makes its own ProSeries professional program, said it will continue to offer customers both products.
“This acquisition fulfills a key strategic objective for Intuit,” Intuit Executive Vice President Bill Harris said in a statement.
Under terms of the agreement, Lacerte will operate as a subsidiary of Mountain View, Calif.-based Intuit. Its senior management team will keep its current responsibilities, with the exception of Larry and Philip Lacerte. They are retiring from day-to-day management of the company while remaining on the board of the new subsidiary company.
Intuit said Monday that its fiscal third-quarter profit rose 58%, beating expectations, on strong sales of its software products and lower manufacturing costs.
It said pro forma profit for the period ended April 30 rose to $10.2 million, or 20 cents a diluted share, from $6.4 million, or 14 cents, a year earlier. The company had been expected to earn 17 cents.
The pro forma results exclude acquisition-related charges, a charge for an agreement with America Online Inc. and a gain from a business it sold.
Pro forma revenue rose 20% to $141.9 million from $117.8 million a year ago. The year-ago revenue figure excluded $18.5 million in sales made by Intuit’s Parsons Technology unit, which it sold last year.
Shares of Intuit fell 88 cents to $45 before trading was halted on Nasdaq. The proposed acquisition and earnings results were announced after the market closed.
