Blucora Acquires Tax-Focused Wealth Management Firm 1st Global

Blucora, Inc., announced this week that it has closed its acquisition of tax-focused wealth management company 1st Global. The final purchase price was $180 million, funded with a combination of cash on hand and an add-on of $125 million to Blucora’s existing credit facility (due in 2024). This acquisition bolsters Blucora’s already significant presence in the tax preparation and advisory services sector.

Dallas-based 1st Global currently serves approximately 850 independent advisors comprising about $18 billion in total client assets as well as $9 billion in for-fee advisory assets. Blucora’s acquisition of 1st Global is projected to be accretive to both the company’s free cash flow and earnings per share.

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Originally founded as Infospace in 1996, Blucora provides Internet-related services in two major areas: search engine services and tax preparation services. Its tax-focused business divisions include HD Vest and TaxAct. HD Vest stands as the country’s premier tax-focused broker-dealer, handling approximately $42 billion of client assets as of last year. TaxAct, on the other hand, is the third largest tax preparation software by market share with roughly four million professional and consumer users.

By acquiring 1st Global, Blucora is expected to be able to strategically expand its existing leadership role within the tax-smart wealth management services sector. The deal also helps build Blucora’s scale and market share by allowing the company to combine HD Vest’s individual tax advisor emphasis with 1st Global’s broader institutional focus.

In announcing the deal, Blucora president and CEO John Clendening emphasized how well-matched the two companies are: “We’re excited to announce the closing of the 1st Global acquisition. This acquisition brings together two complementary firms with a shared vision and creates the largest and most capable tax-focused wealth management firm, which enables advisors to minimize taxes, maximize wealth and enable better long-term outcomes for their clients. With increased scale and enhanced capabilities, we are now positioned to provide advisors and their clients with even greater service, support and solutions for years to come. We welcome the 1st Global advisors and employees to Blucora, and look forward to continuing the profitable growth of our combined organization.”