Avalara buys Businesses Licenses LLC for $97M

Avalara has inked a $97 million deal to buy Business Licenses LLC, which provides software and services for the research, acquisition and management of business licenses, registrations and permits for businesses of all sizes. Avalara is a publicly traded company that provides tax automation software.

Avalara’s growth has been rapid in recent years, bolstered by its successful IPO in 2018. The company’s health in terms of stock price has remained high throughout the pandemic, and has held strong through the ongoing presidential election. The need for tax automation has only strengthened as businesses move online en masse, and a change in government signals new tax legislation. The company’s most recent previous acquisition was that of Transaction Tax Resources for $377 million in cash.

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This buy expands Avalara’s platform to include a complementary compliance solution beyond tax. All of Avalara’s customers are required to obtain and maintain sales tax registrations in the jurisdictions where they have tax nexus. Building upon the existing partnership with Business Licenses, Avalara will now be able to support additional licensing requirements with the ultimate goal of helping reduce regulatory complexity for users.

Bringing Business Licenses’ products and team inhouse could benefit Avalara in three key areas: end-to-end tax compliance for businesses; subscription-as-a-service license management for the whole enterprise; and expanded client content including business license and permit requirements, rules and regulations, statutes, licensing authority contact information, and thousands of pages of license and permit forms, instructions, schedules and other associated documents.

“Business startup and growth begins with licensing and registration; it is the first step on a journey to achieve compliance,” said Scott McFarlane, co-founder and CEO of Avalara, in a statement. “David Polatseck and Abe Brach architected some of the earliest compliance content aggregation and automation tools and deeply understand the needs of growing businesses. Together, we work toward providing a comprehensive and seamless customer experience throughout the entire compliance journey — from registrations to returns to business insights.”

“Avalara and Business Licenses have been partners in alleviating the burden of compliance for years,” added Polatseck, president of Business Licenses, also in a statement. “Our team has focused on helping companies navigate the critical licensing and registration component of compliance for more than 15 years. We are proud to join forces with a pioneer in the global compliance space to advance our shared vision of reducing compliance complexity through automation.”

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Online sales tax Tax tools Automation ERP software M&A Compliance systems
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