In November, it was announced that Cinven will bring TaxAct and Drake Software, a Cinven portfolio company, together over time under a new holding company, creating a leading, full-service tax solutions provider for professionals and consumers.
Cinven, an International private equity firm made the announcement last year after an agreement was reached to acquire TaxAct for approximately $720 million. At the same time that Civen announced the acquisition of TaxAct, they said that moving forward, the exisiting portfolios of both Drake Software and TaxAct would be combined under a single holding company with the intention of creating a full-service tax ecosystem provider with the scope to use the resources and shared principles of the combined businesses to innovate and support their complementary professional tax preparer and individual tax filer customer bases.
Cinven announced in February of 2021 they would be investing in Drake Software and at that time, Phil Drake said that even though they would be taking on an outside investor, operations would continue to be business as usual for the company’s employees. Aside from top-level management shifts, that has remained true. In November 2021, the company announced that after three decades with the company, Jamie Stiles would be leaving and named Euan Menzies as interim Chief Executive Officer. Menzies had previously served as Chairman of the Board of Directors. In May 2022, Drake appointed Dominic (Dom) Morea as President and CEO, with Menzies remaining as Chairman of Drake Software.
“Since investing in Drake in 2021, Cinven has set out to support the Company’s growth plans, including expanding its presence in the professional tax preparation market, renewing its technology platform and enhancing its product offerings for the benefit of Drake’s tax professional customers,” said Chris Good, Partner at Cinven. “The addition of TaxAct’s consumer tax preparation platform will further strengthen Drake’s capabilities to anticipate and serve the needs of all types of customers as today’s tax landscape becomes increasingly sophisticated. This transaction exemplifies Cinven’s track record of working with companies to support their growth and capability expansion strategies, creating better products for customers and increasing opportunities for employees.”
TaxAct is one of the leading providers of digital, do-it-yourself (“DIY”) tax filing assistance software and services, operating in a fast-growing subset of the U.S. tax preparation services market. Since it was founded in 1998, TaxAct has grown rapidly, providing DIY tax filing services to more than 85 million individual filers to date, and was the first online software provider to offer free tax filing services.
With the merger with TaxAct, local operations of Drake Software will likely change considerably — however, those details have not yet been made public.
As the acquisition of TaxAct is finalized, Dom Morea will remain President and Chief Executive Officer of Drake Software and Curtis Campbell will continue to lead the TaxAct business. The businesses will continue to operate under their own brands within the holding company.
In December 2022 when the acquisition was finalized, Dermot Halpin was appointed as Executive Chair of Drake and TaxAct. Halpin specializes in building and scaling high-growth consumer marketplace platforms. Throughout his career, he has led businesses operating worldwide and previously held senior leadership positions including President of Attractions and Vacation Rentals at TripAdvisor and President of Europe, Middle East, and Africa at Expedia. He currently serves as a non-executive Director at Datalex.
“I am thrilled for the opportunity to partner with the exceptional Drake and TaxAct teams to accelerate growth through a focus on how the business can meet the complex needs of tax professionals and individual consumers alike. I have spent my career helping companies and brands create best-in-class organizations, and I share the Drake and TaxAct teams’ unwavering focus on their customers. I look forward to working alongside Curtis and Dom to continue to build our capabilities and deliver best-in-class products for customers across the tax ecosystem.”