Cetera to buy tax specialist firm for $1.2 billion
Summary
As the wealth management acquisition binges rolls on, Cetera Holdings on Monday morning said it was buying Avantax Inc., with close to 3,000 financial advisors who focus on clients’ taxes, for $1.2 billion in an all-cash deal. The acquisition price is $26 per share of stock of Avantax, which has been overhauling its various business lines recently to become focused on financial advisors and the wealth management industry. The company saw a spike in its share price over the summer after activist investor Engine Capital sent a letter to the Avantax board asking it to consider a strategic review of the firm, including a potential sale. The firm made two broker-dealer acquisitions, one in 2015 and the other four years later, spending a combined $760 million for the former HD Vest Financial Services Inc. and 1st Global Inc. “As we explored expanding Cetera’s capabilities into wealth management and tax expertise as a core component of our growth strategy, it quickly became clear that Avantax was an ideal target and a powerful fit for our business,” Durbin said in a statement.