Cinven leverages Visma success to back US professional tax prep software business Drake

Global private equity major Cinven has agreed to back professional tax preparation software business Drake Software.

Drake, which was founded in 1977, says it helps more than 64,000 tax professionals in the US, processing more than 33 million federal and state-accepted returns.

Cinven said its TMT team built on the firm’s success with enterprise resource planning software and services company Visma through the investment, working closely with its US team to identify Drake as an attractive investment.

It cited tresilience and stability of the professional tax preparation market, Drake’s best-in-reputation with its customers, its market-leading position and opportunity for organic and acquisitive growth, and the quality and breadth of its software.

Cinven partner Chris Good said, “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.

“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.”

Cinven sold its stake in business software provider Visma two years ago to an HgCapital-led consortium, sealing what was the largest-ever European software buyout.

The deal, which also saw KKR sell up, valued Visma at €4.7bn.

Cinven has also scored TMT investment successes with exits of Ufinet Group and HEG in the last few years.

Recent investments have included Spanish telecommunications operator MasMovil, procurement software business Jaggaer and global digital advertising tech provider RTB House.

Ropes & Gray provided legal advice to Cinven on the transaction, Chambliss, Bahner & Stophel provided legal advice to Drake, and Deloitte Corporate Finance acted as financial advisor to Drake.