Intuit is reorganizing its Accounting Professionals Division as part of a larger corporate reorganization that includes the divestiture of the Intuit Financial Services division and a plan to sell the Intuit Health Group.
Intuit said Monday that the realignment of its Accounting Professionals Division builds upon organizational changes originally announced in May to capitalize on global opportunities and sharpen its focus on its core businesses (see Intuit Undergoes Reorg Behind Global Initiative).
The new lineup includes two small business divisions pursuing opportunities around the world; two organizations focused on consumers—Consumer Tax, overseeing the tax preparation business in the U.S. and Canada; and the newly formed Consumer Ecosystem, focused on solving additional important consumer problems beyond tax.
Two organizations will also be dedicated to accountants. The first accounting organization, the Accountant and Advisor Group, will focus exclusively on building a loyal base of accountants around the globe who use and recommend Intuit’s small business solutions.
“The role that accountants and advisors play in small businesses’ success has never been more important,” said Intuit president and CEO Brad Smith in a statement. “It will be a critical component as we pursue our goal to be the world’s small business operating system.”
The second accountant organization, ProTax, will focus on winning the professional tax category in North America, capitalizing on the shift to cloud and mobile-based solutions.
“This strengthens our opportunity to work directly with accountants as they purchase our Lacerte and ProSeries software to help them prepare their clients’ taxes,” Smith added. “And we have opportunities to accelerate growth as accountants shift online and we expand our “right for my firm” tax software and services lineup.”
These changes, combined with the May realignment, become effective Aug. 1 in conjunction with the company’s new fiscal year.
Sales of Intuit Financial Services and Health Group
To focus more sharply on its core businesses, Intuit also said Monday that it is divesting its Intuit Financial Services business, selling it to the private equity firm Thoma Bravo, and announced plans to sell the Intuit Health Group.
“These decisions are the remaining foundational pieces that focus our organization on our biggest opportunities as we execute our global connected services strategy,” Smith explained. “We’ve evolved from a portfolio of business units to an ecosystem of products and services with unique interdependencies. Working together, these assets create amazing opportunities to solve important customer problems while building durable competitive advantage.”
The divestiture of Intuit Financial Services reflects Intuit’s commitment to intensify its focus on small business and consumer tax. As a result, the company signed a definitive agreement to sell IFS to Thoma Bravo for $1.025 billion, pending regulatory review.
As part of Thoma Bravo, Intuit said IFS would be better supported to reach its full potential in the growing digital banking channel. Intuit intends to use existing cash and the proceeds of this transaction to accelerate repurchase of its shares.
“Thoma Bravo is gaining a richly talented team that has created an enviable integrated digital banking platform and innovative mobile solution, recognized as the best in the market,” said Smith. “Intuit will sharpen its focus on directly serving consumers and small businesses, and continuing to build our durable competitive advantage in those segments.”
Mint.com, which is currently part of IFS, will remain with Intuit and become part of the Consumer Ecosystem business unit that includes other consumer products such as Quicken.
Intuit also plans to sell the Intuit Health Group. While Intuit had considered health care 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, Smith said. The Intuit Health Group assets will be a better fit for an organization with a stronger focus on the health care industry, according to the company.
The company expects to classify IFS and Intuit Health Group as discontinued operations. In fiscal 2012, the two planned divestitures contributed combined revenue of approximately $320 million. In fiscal 2013, the two planned divestitures are expected to contribute revenue of approximately $340 million.
Based in Westlake Village, Calif., IFS has 730 employees in several offices in the United States and India.
“Thoma Bravo’s acquisition of IFS is consistent with our strategy of buying great technology franchises with significant recurring revenue,” said Thoma Bravo Orlando Bravo in a statement. “We look forward to accelerating the company’s growth as an independent business through our buy-and-build principles.”
Once the transaction closes, Thoma Bravo will provide IFS with leadership and resources to meet the needs of customers in the growing digital banking channel across the financial services industry.
“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 Thoma Bravo partner Holden Spaht in a statement. ”Thoma Bravo will continue to support the company’s mission of providing best-in-class products to support its large base of customers and end users.”
The transaction will result in a stand-alone company focused on providing a digital banking platform and market-leading mobile solutions to financial institutions. The transaction includes an Internet banking platform, digital payments, mobile banking, Purchase Rewards, FinanceWorks, and digital banking add-on solutions as well as third-party solutions. But certain assets that are currently included in the IFS division, including OFX connectivity and Mint.com, will remain with Intuit.
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