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March 21, 2019

Blucora to purchase tax-focused wealth manager 1st Global

Tax-driven financial solutions provider Blucora, which owns HD Vest, has agreed to buy 1st Global, a tax-focused wealth manager headquartered in Texas, for $180m.

1st Global works with large, multi-partner accounting firms.

The business oversees around $18bn in total client assets, including $9bn in advisory assets. It tends to nearly 850 independent advisers.

The acquisition will boost Blucora’s total assets to $60bn and adviser headcount to 4,500.

Blucora anticipates $23 – $24m of run-rate adjusted EBITDA accretion from the deal by this year-end.

The latest takeover marks the second such deal by Blucora.

In 2015, the firm announced the acquisition of HD Vest in a deal worth around $580m.

HD Vest specialises in converting individual tax preparers into wealth advisers.

Blucora president and CEO John Clendening said: “Clients are underserved unless their financial adviser has the capability to advise specifically on the tax implications of investment decisions.

“We now have the opportunity to leverage each businesses’ unique capabilities and technologies to help advisers deepen their relationships with clients while expanding our footprint in the marketplace to drive scale and growth.”

The deal is currently pending regulatory nod and slated to complete in the second quarter of this year.

It will be financed with available cash reserves and a $125m add-on to its credit facility.

1st Global chairman and CEO Tony Batman said: “Given Blucora’s strong business model and demonstrated execution, and the similarities between the businesses, we believe Blucora is the ideal acquirer for us.”

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