Sovos buys unclaimed property business from Keane
Tax software provider Sovos has acquired Keane’s unclaimed property consulting services and reporting technology. This is the fourth buy for Sovos this year, making 2020 its most acquisitive year. As states turn to services like the Keane Unclaimed Property system to recoup losses during the COVID-19 pandemic, Sovos continues to position itself for the post-pandemic world.
Even before the pandemic hit the U.S., states had increasingly been viewing unclaimed property as a key revenue driver and audit target. High-profile lawsuits between states and an ongoing case before the U.S. Supreme Court have also raised awareness. Simultaneously, states have been expanding the types of abandoned property subject to regulation beyond traditional cash assets. States are also reducing dormancy periods (the time between when a bank reports an asset to be unclaimed and when a state considers it abandoned) and leveraging third parties to conduct multi-state audits that can last for years. These and other changing obligations present challenges for businesses, particularly those operating and reporting in multiple states.
“Unclaimed property is a growing concern of companies operating in the U.S., where it is estimated the vast majority — as many as 80 percent — are out of compliance,” said Sovos CEO Andy Hovancik in a statement. “By expanding our unclaimed property offerings, Sovos advances its long-range plan to deliver the most complete solutions and services for modern tax compliance and regulatory reporting, and safeguard our customers everywhere they do business.”
Keane’s consulting practice assists clients with state audits, penalty abatement, voluntary disclosures and escheated fund remission (a government's right to take unclaimed property). Its enterprise-level solutions complement Sovos’ unclaimed property software-as-a-service platform, as well as its tax and regulatory reporting business.
“Companies need SaaS and services support in unclaimed property compliance more than ever. On-premise software and paper-based processes are inaccessible to teams working from home during pandemic shutdowns, and more companies are looking to harness the cost benefits of remote work over the long term,” said Paul Banker, vice president and general manager of the tax and regulatory reporting line of business at Sovos, also in a statement. “Whether companies choose to outsource reporting, a decision often triggered by audits, or use leading SaaS solutions to manage reporting in house, Sovos is uniquely positioned to deliver the best options for unclaimed property compliance.”
Sovos reports that many of its tax customers request solutions with capabilities not only for tax information reporting, but also for unclaimed property compliance and statutory reporting.
The terms of the deal were not disclosed. Sovos is owned by Hg, the London-based specialist private equity investor focused on software and service businesses. EY served as financial advisor to Sovos.