TA Associates in $287m software exit

The mid-market firm has agreed to sell a controlling stake in digital tax preparation company 2nd Story Software. TA became a majority shareholder in 2nd Story after completing an $85m recapitalisation of the company in 2004.

TA Associates has agreed to sell a controlling stake in digital tax preparation company 2nd Story Software to H&R Block for $287.5 million. The deal is expected to close before the end of the year.

TA became a majority shareholder in 2nd Story after completing an $85 million leveraged recapitalisation of the company in December 2004.

H&R Block will combine its branded “At Home” digital tax preparation business with 2nd Story's digital tax solutions product TaxACT, but will continue to offer both brands to the public. TaxACT was used by more than five million tax filers in 2010.

H&R Block estimates the transaction will add $.05 in earnings per share in its fiscal year ending 30 April, 2011.

In July, TA Associates sold internet travel agency eDreams to Permira for between $350 million and $420 million, two sources close to the deal said at the time. The transaction saw TA generate a return multiple of 3x for the European company.

The firm's last software investment came in October 2009 when it paid $200 million for a minority stake in Czech-headquartered AVG Technologies.