Intuit buys PayCycle for $170 million in online move
LOS ANGELES |
LOS ANGELES (Reuters) - Intuit (INTU.O) has agreed to buy online payroll services provider PayCycle Inc for about $170 million, bolstering its business in that segment and furthering its goal to boost online delivery of software.
Intuit said on Tuesday it also hopes to gain access to PayCycle's portfolio of financial-institutional and small-business clients, among which are Capital One (COF.N) and PNC Bank.
The financial software designer, which last month posted better-than-expected quarterly earnings on the strength of its TurboTax tax preparation programs, expects the deal to reduce earnings on a GAAP basis by 2 cents a share in its fourth quarter.
But the transaction will cease to have any material impact on fiscal 2010 earnings, the company added in a statement. Intuit's fiscal third quarter ended April 30.
Shares of the Mountain View, California software company, which closed 9 cents higher at $27.72 on Nasdaq, held steady after-hours.
PayCycle specializes in serving small businesses, accountants and financial institutions and has more than 85,000 small-business users, Intuit said.
"We share a common vision: using the Internet to deliver a secure and easy-to-use payroll solution to small businesses," said PayCycle CEO Jim Heeger, who at one point served as Intuit's chief financial officer.
Intuit said the cash transaction amount was "subject to adjustment," but did not elaborate. The deal is expected to close in the calendar third quarter, subject to regulatory review.
(Reporting by Edwin Chan; Editing by Richard Chang)
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