Avantax to be Acquired by Cetera Holdings

Avantax, Inc., a provider of tax-focused financial planning and wealth management, will be acquired by Cetera Financial Group. Cetera Holdings, the holding company of Cetera, will acquire all of the issued and outstanding equity of Avantax in an all-cash transaction valuing Avantax at approximately $1.2 billion, inclusive of Avantax’s net debt.

Following the closing, 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. Through the transaction, Cetera 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.

“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. “I am extremely grateful to our extraordinary community of financial professionals as well as the entire Avantax team for their unwavering focus and steadfast professionalism throughout our transformation. I am confident that this combination with Cetera is beneficial for Avantax, our financial professionals, employees and stockholders.”

“Over the past several years, Avantax’s Board and senior management team have positioned the Company for long-term, sustainable growth through a simplified strategy, strengthened balance sheet and improved operational performance while exploring strategic opportunities for the future success of the business,” said Georganne Proctor, Avantax’s Chair of the Board. “These efforts and the strength of our platform, people and financial professional community have not gone unnoticed. After carefully evaluating how best to maximize value for our stockholders, the Board unanimously determined that this transaction is in the best interests of Avantax and its stockholders. We also believe that this will position the business, our people, our financial professionals and our affiliates for the future.”

“As we explored expanding Cetera’s capabilities into wealth management and tax expertise as a core component of our growth strategy, it quickly became clear that Avantax was an ideal target and a powerful fit for our business,” said Mike Durbin, CEO of Cetera Holdings. “As we enter Cetera’s next phase of evolution, our five-year growth strategy is off to a terrific start. Avantax will significantly build out Cetera’s capabilities in tax and wealth management. As we have said in the past, disrupting the market with expanding capabilities means more flexibility for advisors, and developing adjacent capabilities and channels expands our addressable market. This acquisition will activate this potential and represents an important milestone in Cetera’s growth trajectory.”

“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,” continued Mr. Durbin.

“This acquisition will establish a strategic relationship between Cetera and Fidelity, which will enable Cetera to expand further into a multi-custodial platform, enhancing Cetera’s capabilities to provide tools and functionalities for its affiliated advisors. We are executing against our multi-custodian aspirations, and capturing new markets and adjacencies,” said Adam Antoniades, CEO of Cetera Financial Group. “We will take a thoughtful, personalized, and proactive approach with Avantax to ensure Avantax’s valued financial professionals aren’t disrupted in any way. Our tax-centric Cetera Financial Specialist team has already created a formidable presence in our industry, and we are delighted that after the closing of this acquisition, we will be able to offer all of our advisors even greater opportunities to expand into tax and accounting.”