Cetera to Take Tax-Focused Avantax Private in $1.2B Deal

Cetera Holdings, a financial planning firm, will pay $1.2 billion in cash to purchase Avantax, a tax-focused financial planning and wealth management company that collaborates with accounting firms.

Cetera will pay $26 per share, representing a premium of approximately 30% to the closing price of shares of Avantax common stock on September 8, 2023.

According to the terms of the agreement, Dallas-based Avantax will become an independent business unit of San Diego-based Cetera, bringing 3,078 Avantax financial professionals and $83.8 billion in assets under administration and $42.6 billion in assets under management as of June 30, 2023.

Genstar Capital-backed Cetera, which is the parent of $341 billion Cetera Financial Group, will hold onto Avantax’s legal entities, core technology, product offerings and existing clearing and custody relationships.

“This transaction, upon closing, will deliver immediate cash value to Avantax stockholders, noted Chris Walters, CEO of Avantax.

Avantax was previously known as Blucora, which rebranded as Avantax in November of last year after Blucora sold its TaxAct tax preparation software to a private equity firm to focus on its Avantax financial planning and wealth management business.

The announcement also comes after activist Engine Capital suggested in June that Avantax begin examining alternatives, including a possible sale. Engine Capital, which owns 2% of Avantax, believes the company is worth $27 to $32 a share.