Thomson Reuters and Sureprep acquisition, Image Credit PixabayTumisuThomson Reuters has completed the acquisition of SurePrep LLC, a US-based leader in 1040 tax automation software and services. It first announced its intent to acquire the tax preparation software specialist in November 2022 for $500 million in cash. SurePrep will become part of its Tax and Accounting Professionals’ Operation. David Wyle, CEO and founder of SurePrep, will join Thomson Reuters.

In a supporting video, Wyle commented, “We are very excited too. This is a landmark moment for us and our customers. We started in 2002 with the mission to be the leader in 1040 tax automation, and over the past 20 years, we have achieved that goal with our solutions being used by over 23,000 tax professionals at firms ranging from the big 4 to sole practitioners. I can’t thank our team and customers enough for the trust they have put in us.

“Leading up to this acquisition, we had an integration partnership with Thomson Reuters. That helped us deliver more automation and connected workflows to our mutual customers. We also had a reseller partnership that helped us bring these benefits to more firms. The success of those partnerships proved how much benefit we can bring to our customers and this industry by joining forces to deliver end-to-end tax automation.”

Who are SurePrep?

SurePrep is a California-based company that provides tax preparation solutions to accounting firms. Its solutions leverage AI to deliver the OCR, with at least 16 US patents covering its technology. SurePreps software solutions include the following:

  • TaxCaddy: 1040 client collaboration software
  • 1040SCAN: Scans and populates documents into 1040 forms
  • SPBinder: Tax workpaper preparation software

SurePrep also provides a full outsourced tax preparation service leveraging SPBinder and working with a mix of tax solutions, including CCH Axcess Tax, CCH ProSystem fx Tax, GoSystem Tax RS, Lacerte, UltraTax CS, and Virtual UltraTax CS. Its solutions integrate with Thomson Reuters software and others using its open API. This strategy is one that SurePrep will continue to support under the ownership of Thomson Reuters. SurePrep will continue to sell its software in support of other vendors but will look to strengthen the integration and cross-selling motions with Thomson Reuters.

Why did Thomson Reuters buy

With a proven partnership in place, the decision to acquire SurePrep probably came down to the deal that was made. Thomson Reuters has added a business expected to generate $60 million in revenue during 2022, and it aims to grow the revenues by a further 20% every year for the next five years. The company did not estimate what growth to Thomson Reuters own revenues the company would add. However, EBITDA is expected to be neutral in the first year as the units work closer together. The acquisition supports the organic and inorganic growth strategy within Thomson Reuters and makes sense.

Elizabeth Beastrom, President of Tax & Accounting Professionals at Thomson Reuters
Elizabeth Beastrom, President of Tax & Accounting Professionals at Thomson Reuters

Elizabeth Beastrom, President of Tax & Accounting Professionals at Thomson Reuters, commented, “We are wholly focused on helping tax professionals be more productive by providing them with the tools they need for success. SurePrep helps customers save both time and costs as they face difficult economic conditions, as well as greater legislative complexity. We are eager to unlock SurePrep’s true potential across our Tax and Accounting customers as we provide an open, integrated platform. Thomson Reuters will continue existing product integrations, with plans to develop further support for a connected tax ecosystem.”

Enterprise Times: What does this mean

This acquisition strengthens the Thomson Reuters portfolio but does so at a cost. That cost has made SurePrep’s investors happy, with Pavan Tripath, growth investor at Bregal Sagemount, remarking, “Congratulations to the entrepreneurial, innovative, and client-centric team at SurePrep LLC. The entire team at Bregal Sagemount is thrilled and thankful to be part of the story… and we are excited for the next phase of SurePrep’s journey with Thomson Reuters. The best is yet to come!”

Bregal Sagemount led the private equity investment into the firm in 2019, the only funding the company seems to have received in its history. At eight times revenue, the investment seems to have paid off. This deal seems good news for Thomson Reuters and SurePrep, including customers, employees and investors. However, there will no doubt be some departures from SurePrep in the coming months, and Thomson Reuters did not reveal what role David Wyle would take up.


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