Toronto-based Wave Financial, a financial planning software company for small businesses, is set to be acquired by H&R Block, one of the largest tax preparation companies in the world, for $537 million CAD.
The software company announced the acquisition on Tuesday, a transition that will allow the large financial institution to tap into the small business market.
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“It is with incredible excitement that I share that today H&R Block has signed an agreement to acquire Wave,” said Kirk Simpson, Wave Co-Founder and CEO.
“Since starting Wave in 2010, we have had a singular focus on simplifying the lives of small business owners, and we have been so excited to see so many of you come along with us on this journey,” said Simpson.
Following the acquisition, H&R Block’s product and client portfolio will expand with the addition of Wave’s accounting, invoicing, payments, and payroll software solutions.
According to H&R Block, the transaction is expected to close within the next few months, subject to regulatory approval and customary closing conditions.
Based on the expected timing of closing, H&R Block estimates that the transaction will generate $40 to $45 million of revenue for fiscal 2020.
Simpson said both companies have a shared vision of how they want to serve small businesses, and will both “continue to operate as before, including our brand, our products and our pricing.”
Following the acquisition, Wave will still operate from its headquarters in Toronto, which currently employs over 250 people.
Wave provides its software for free to millions of entrepreneurs and freelancers around the world, and its revenue is generated through the company’s paid financial services, which includes Payments and Payroll by Wave.
All of these products and services are used by over 400,000 small businesses globally every month.