International equity firm invests in Drake Software
International private equity firm Cinven recently announced that it has agreed to make a significant investment into Drake Software, a provider of software for tax preparers headquartered in Franklin.
Financial details of the transaction are not being disclosed. Drake is a leading provider of professional tax preparation software. It provides the tools and resources that tax professionals need to build their businesses and attract new clients. Drake employs more than 600 people across five offices in North Carolina, Tennessee and Virginia. More than 64,000 tax professionals nationwide use Drake, and each year the company processes more than 33 million federal and state-accepted returns. The business was established in 1977 by founder Phil Drake.
Building on its successful investment in Visma, a provider of Enterprise Resource Planning software and services — including accounting, tax and payroll applications — Cinven’s Technology, Media and Telecom (‘TMT’) Sector team worked closely with its U.S. team to identify Drake as an attractive investment opportunity, given the resilience and stability of the professional tax preparation market; Drake’s best-in-class reputation with its customers, evidenced by its market-leading customer retention rates and high recurring revenues; its market leading position, with the opportunity for further organic and acquisitive growth and the quality and breadth of the company’s software, with recent success in cross-selling new products and opportunities for the introduction of add-on products.
Cinven will be working with the highly experienced Drake management team, with Jamie Stiles continuing in his role as president and CEO of Drake Software.
“This is a truly outstanding opportunity for Cinven to invest behind a team that has not only built a product that is loved by its customers, but also has a well-established position in a stable market with a wide range of exciting growth prospects,” said Chris Good, partner at Cinven. “We believe Cinven is well positioned to support the company through its next stage of growth, especially given its track record of investing successfully in technology-focused companies such as Visma and Jaggaer.”
“We are delighted to have the chance to work with Jamie and the Drake management team. We plan to invest behind the company’s growth plans to expand Drake’s presence in the market, renew its technology platform, and enhance its product offerings for the benefit of Drake’s employees and customers,” Daniel Garin, principal at Cinven.
The transaction is subject to customary anti-trust approvals. Ropes & Gray LLP provided legal advice to Cinven on the transaction. Chambliss, Bahner & Stophel, P.C. provided legal advice to Drake Software. Deloitte Corporate Finance LLC acted as financial advisor to Drake Software.