In its second acquisition in as many months, Wolters Kluwer business CCH made another big splash in the small practitioner market with the announcement of its agreement to purchase Tax Wise Corp.
Financial terms of the transaction, which also includes Rome, Ga.-based subsidiary Universal Tax Systems Inc., were not disclosed.
CCH president and chief executive Kevin Robert said the Labor Day deal for TaxWise was one that had been previously attempted years earlier.
"I'm still not sure [how all the pieces] fell into place all at once," Robert told WebCPA. "But it's an absolute home run for us. We've always considered there to be two premier players in the upper-end, small practitioner space."
The other player, of course, being the former ATX/Kleinrock, which CCH acquired in August. Both TaxWise and ATX/Kleinrock provide tax and accounting software to small and midsized businesses across the country and employ about 300 workers each. Both businesses will continue to be run as separate business lines, independent of the larger CCH software offerings, though Robert said there will be a number of features that can naturally be incorporated across product suites. From the TaxWise line, he specifically mentioned its e-filing services and bank products.
TaxWise and UTS provide tax and accounting software solutions to nearly 10,000 CPAs, accounting professionals, enrolled agents and tax preparers across the country, and has annual revenues of approximately $53 million. Like the ATX/Kleinrock deal, the acquisition will help CCH penetrate a market that was not suited for the specialized returns the ProSystem fx Tax application specializes in.
Robert and TaxWise chief executive Bill Anderson stressed that the "value proposition" of the product would remain the same. "Price is an easy thing to focus on," Anderson said. "We've been the premium price in this segment and we've backed that up with a high level of support ... The most important thing for us has been taking that different approach to providing service to the customer."
For CCH, a Wolters Kluwer business, Robert said the key remains continuing to learn faster than the competition. "That's the only competitive advantage in this business," he said. "From each of these businesses, we're going to be learning a lot from the team and from existing customers. From there its about applying that knowledge to the right products and services to support our clients."
The TaxWise deal is still subject to a number of closing conditions, which should be completed before the close of the calendar year.
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