Cetera to Acquire Avantax for $1.2 billion
Avantax Inc. (NASDAQ: AVTA), a tax-focused financial planning firm, and the parent company of Cetera Financial Group, one of the nation’s largest networks of independently managed broker-dealers, have entered into a definitive agreement whereby Cetera will acquire Avantax in an all-cash transaction totaling approximately $1.2 billion.
Upon closing, the company says Avantax will become a standalone business unit within the Cetera family with 3,078 Avantax financial professionals, representing $83.8 billion in assets under administration and $42.6 billion in assets under management, as of June 30, 2023.
Cetera says it will retain Avantax’s legal entities, core technology, product offerings and existing clearing and custody relationships.
Holders of shares of Avantax common stock will receive $26.00 in cash per share, without interest and subject to required withholding taxes. The purchase price represents a premium of approximately 30% to the closing price of shares of Avantax common stock on September 8, 2023, the last full trading day prior to announcement of the transaction.
“The addition of Avantax Planning Partners, an award-winning employee-based RIA with over $7.6 billion in assets under management, will complement and strengthen Cetera’s recently launched, highly successful succession solution offering and will deliver a combined offering that is even more compelling and impactful across all of the advisor communities,” said Mike Durbin, chief executive officer of Cetera Holdings.
Avantax’s board of directors unanimously approved the transaction, and says it is expected to close by the end of 2023, subject to stockholder approval, regulatory approvals, and other customary closing conditions. The transaction is not subject to any financing condition.
“This transaction, upon closing, will deliver immediate cash value to Avantax stockholders. It is a result of Avantax’s strategic transformation and value creation efforts, which, when combined with the sale of TaxAct in December 2022, has unlocked significant value for our stockholders,” said Chris Walters, chief executive officer of Avantax.
Upon completion of the transaction, Avantax will become a privately held company, and its common stock will no longer be traded on Nasdaq.
Cetera Financial Group serves more than 9,000 independent financial professionals and their teams, including tax professionals, banks and credit unions in providing financial planning and wealth management services. Cetera oversees approximately $341 billion in assets under administration and $121 billion in assets under management.
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