Cetera Financial Group today announced its acquisition of financial planning and wealth management firm Avantax, in an all-cash transaction of approximately $1.2 billion that will include the firm’s net debt.
The Dallas-based firm focuses primarily on tax services, and currently holds 3,078 financial professionals, $83.8 billion in assets under administration and $42.6 billion in assets under management as of June 30.
Through the transaction, Cetera will retain Avantax’s legal entities, core technology, product offerings, and existing clearing and custody relationships.
Following the closing, Avantax will become a standalone business unit within the Cetera umbrella. Its shareholders will receive $26 in cash per share, without interest and subject to required withholding taxes. The firm’s common stock will also no longer be traded on the Nasdaq.
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, said Avantax in a release on the announcement.
“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, in a statement.
As a part of the acquisition, Fidelity will also serve as a custodial partner for Cetera.
“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,” added 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.”
The transaction is expected to close by the end of 2023, subject to stockholder approval, regulatory approvals, and other customary closing conditions.
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