FOCS - Avantax ticks higher amid takeover speculation
2023-06-12 10:50:54 ET
Avantax ( NASDAQ: AVTA ) ticked up 0.4% after earlier gaining as much as 3.5% amid speculation that the company could be a takeover target.
Avantax ( AVTA ), formerly known as Blucora, agreed in November to sell its TaxAct tax software business to an affiliate of Cinven for $720 million in cash.
Following the sale, Avantax ( AVTA ) is now a "sub-scale" registered investment advisor that could be a target for private equity funds that have been acquiring RIA rollups in recent years, according to a Gordon Haskett note from Don Bilson on Monday.
Avantax ( AVTA ) may be worth $33–$34 per share in sale, based on the 11x EBITDA that buyout firm Clayton, Dubilier & Rice a greed to buy Focus Financial ( FOCS ) for $7 billion in February, Bilson added. AVTA currently trades for around 7x EBITDA.
A potential sale comes after activist Engine Capital said last Monday that Avantax ( AVTA ) should start exploring alternatives, including a potential sale. Engine Capital, which owns a 2% stake in AVTA, argued that the compan y could fetch between $27 and $32 per share.
In late January, Avantax ( AVTA ) launched a $250 million modified Dutch auction tender offer at a price per share not less than $27.00 and not greater than $31.00.
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Avantax ticks higher amid takeover speculation