* To sell Intuit Financial Services to Thoma Bravo for $1.03
* To use proceeds for share buyback
* Plans to also sell Intuit Health Group
* Shares up 5 pct on Monday
By Aman Shah
July 1 Intuit Inc will sell its
financial services unit to private equity firm Thoma Bravo LLC
for more than $1.03 billion as part of a plan to shed peripheral
assets after a weak tax-filing season, sending its shares up as
much as 5 percent.
Intuit, developer of the tax-preparation software TurboTax,
had hinted at a reorganization after a delayed start to the U.S.
tax season hurt its results for the first half of the year.
It announced an organizational realignment in May to focus
on expanding its tax-preparation services and its small business
group unit, under which it provides its flagship accounting
Intuit bought the financial services unit, then called
Digital Insight, for $1.35 billion in 2007. The unit, now known
as Intuit Financial Services (IFS), failed to match the
company's expectations, with growth lagging behind that of its
IFS, which provides banking software to financial
institutions, reported a revenue growth of 9 percent for the
quarter ended April. In contrast, revenue at Intuit's small
business unit rose 17 percent and that at its consumer tax
division increased 14 percent.
"The financial institutions' online banking business was
never well integrated into the company," Wedbush Securities'
analyst Gil Luria told Reuters.
Intuit, which also announced it was planning to sell its
health group, said it would use the proceeds from the IFS deal
to boost its share repurchase program.
As of April 30, Intuit had $1.4 billion remaining for stock
repurchases under the program, which runs through Aug. 15, 2014.
Raymond James analyst Wayne Johnson said Intuit would
benefit from the deals, which would help the company focus on
its core businesses.
Johnson upgraded Intuit's stock by two notches to "strong
buy" from "market perform" earlier on Monday, before the deal
IFS accounted for 9 percent of the company's revenue in 2012
and has 730 employees in offices in the United States and India.
It is expected to have about $325 million in revenue in fiscal
2013, Intuit said.
Some IFS assets, including OFX connectivity and Mint.com, a
popular free online personal finance software with 5 million
users, are not part of the deal.
"I think it's a fair deal for them (Intuit)," Morningstar
analyst Andrew Lange said. "It's not totally spectacular,
probably more like just take a fair deal and move on."
Spokeswomen at Thoma Bravo and Intuit declined to comment
beyond the statement.
Intuit shares, which have fallen 7 percent in the last three
months, were trading up 4 percent at $63.50 at 1300 ET on Monday
on the Nasdaq.