Thomson Reuters to acquire SurePrep

Thomson Reuters has announced that it will acquire SurePrep, LLC, a US maker of 1040 tax automation software and services, for $500 million in cash. Thomson Reuters expects to receive an estimated tax benefit with a net present value at the time of purchase of approximately $60 million as part of the transaction.

Founded in 2002, SurePrep aims to help accounting firms increase productivity and profitability while fostering a fully digital tax workflow. SurePrep’s products and solutions are used by more than 23,000 tax professionals at accounting firms, wealth management firms and others.

Closing of the transaction is subject to specified regulatory approvals and customary closing conditions and is expected to occur in the first quarter of 2023.

With a mobile-friendly design, SurePrep leverages artificial intelligence to automate the collection of digital documents directly from clients and the processing of those documents, automatically extracting and populating key data into the company’s tax compliance software. company to help CPAs be more effective. Major SurePrep software and services include 1040SCAN, SPbinder and TaxCaddy.

SurePrep is expected to generate approximately $60 million in revenue in 2022 and grow more than 20% annually for the next few years. Adjusted EBITDA is expected to be neutral in the first year, followed by year-over-year increases thereafter as integration costs decline and revenues increase. Earned deferred revenue should be a modest drag on free cash flow in the first year.

Thomson Reuters and SurePrep have been partners since April 2022, providing complementary solutions that benefit tax and accounting professionals. Thomson Reuters will continue its open ecosystem strategy following the acquisition of SurePrep, with the combined entity providing an enhanced foundation to accelerate investments in automation and customer experiences.

“Thomson Reuters sees significant value and opportunity in SurePrep. The acquisition will support our strategy to equip tax and accounting professionals with the best technology to simplify workflows, generate insights and improve efficiency,” said Elizabeth Beastrom, President of Tax Professionals and accounting at Thomson Reuters.

“This transaction builds on our existing partner/reseller agreement to realize our vision of end-to-end tax automation that solves our customers’ top pain points,” said Dave Wyle, CEO of SurePrep. “In addition, Thomson Reuters has made clear its commitment to maintaining SurePrep’s ability to interact with multiple vendors in an open tax software ecosystem. We couldn’t be more excited about what this combination brings to our team members, our customers, and the future of applied artificial intelligence. »

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