InfoSpace to buy TaxACT for $287.5 million

(Reuters) - Internet search provider InfoSpace Inc INSP.O said it would buy privately held tax software developer TaxACT for $287.5 million in cash to move into the online tax preparation business.

InfoSpace, known for search engines as Dogpile, MetaCrawler and WebCrawler, said the deal would immediately add to its profit.

"As the market continues its shift toward online 'do-it-yourself' tax preparation, we are confident that we can leverage our online expertise and TaxACT's industry leading solutions," Chief Executive William Ruckelshaus said in a statement.

InfoSpace said it will fund the deal through a combination of cash on hand and debt, and has secured a financing commitment of about $95 million.

Cedar Rapids, Iowa-based TaxACT provides federal tax software for individuals and businesses. The combined company is expected to have cash and investments of more than $90 million.

InfoSpace shares closed at $11.03 on Friday on the Nasdaq.

Reporting by Soham Chatterjee in Bangalore; Editing by Viraj Nair