Intuit is selling its financial services (IFS) unit to private equity firm Thoma Bravo for $1.03 billion in cash, the company announced on Monday.
The moves comes as part of a shift towards higher margin online services for Intuit, which will use the funds from the deal to repurchase shares, according to The Wall Street Journal. The sale of IFS comes after a lackluster tax season that hurt Intuit’s core tax-preparation business.
“Intuit will sharpen its focus on directly serving consumers and small businesses, and continuing to build our durable competitive advantage in those segments,” said Intuit president and CEO Brad Smith.
As VentureBeat notes, IFS is among Intuit’s smallest business divisions, representing just 9 percent of the company’s total net revenue in 2012. And from that IFS division, Intuit will retain Mint.com, its personal finance tool, and its Open Financial Exchange (OFX) unit.
Some of Intuit’s best-known products, such as QuickBooks and TurboTax, will be unaffected by the sale.
What Thoma Bravo gains from its purchase is a new suite of solutions through which to target the financial services industry. Thoma Bravo will control IFS’ digital payments and rewards system, as well as a platform for Internet and mobile banking. The firm will create a “stand-alone” company” from its acquisition, which also encompasses Intuit’s Purchase Rewards and FinanceWorks platforms.
“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,” said Holden Spaht, partner at Thoma Bravo.
Intuit is also seeking a buyer for its health unit, which is a “web-based service for medical providers to manage appointments and billings,” according to Bloomberg.
“While Intuit had considered healthcare a potential growth opportunity, structural shifts in the market have evolved in such a way that the business no longer fits within the refocused strategy,” the company said.
By shedding most of its IFS unit and selling its Health Group as well, Intuit seems intent on focusing on its core competencies. While no timeline was given for the sale of Intuit’s health segment, Thoma Bravo’s IFS sale is expected to close in the next few months.
Intuit shares ended the day up nearly 3.46 percent at $63.15.
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