Thomson Reuters Corp. TRI-T has acquired tax automation software company cPaperless LLC, which does business under the SafeSend brand, in a US$600-million cash deal, adding to the information and software provider’s business that serves tax and accounting professionals.
Michigan-based SafeSend makes cloud-based software that automates the final stages of the tax filing process, including e-signatures and delivery. The company says that 70 per cent of the top 500 accounting firms in the United States use its products.
Over the past two years, Thomson Reuters has been building out its tax business by making modest acquisitions to bolster its suite of products, starting with a US$500-million deal for tax automation software provider SurePrep LLC in early 2023. Last October, Thomson Reuters bought U.S.-based startup Materia, which is developing an artificial-intelligence-based assistant for tax, audit and accounting professionals.
Thomson Reuters chief executive officer Steve Hasker told analysts in November that he expected to continue to do similar, smaller deals. The company expects to have about US$10-billion of capacity to make acquisitions through 2027. “As it pertains to anything bigger, we’re going to keep the bar really high,” Mr. Hasker said at the time.
“We believe this transaction is highly consistent with Thomson Reuters’ ongoing tuck-in M&A playbook,” Drew McReynolds, an analyst at RBC Dominion Securities Inc., said in a note to clients.
Tax and accounting is one of Thomson Reuters’s three core business lines, along with divisions that cater to legal and corporate customers. The tax and accounting arm is among the fastest-growing parts of the company, and reported US$799-million of revenue in the first nine months of 2024, which was a 12-per-cent increase from the same period in 2023 – or 14 per cent after removing the impact of currency fluctuations.
Thomson Reuters expects SafeSend to earn about US$60-million of revenue in 2025, and to increase that total by more than 25 per cent annually in the next few years.
“This acquisition underscores our commitment to addressing the evolving challenges faced by tax professionals and taxpayers alike,” Elizabeth Beastrom, president of tax, audit and accounting professionals at Thomson Reuters, said in a news release.
Thomson Reuters plans to continue to offer SafeSend to customers, connecting it to several other vendors as part of an ecosystem of tax software. SafeSend co-founders Steve Dusablon and Andrew Hatfield signalled that they plan to stay on after the acquisition.
Woodbridge Co. Ltd., the Thomson family holding company and controlling shareholder of Thomson Reuters, also owns The Globe and Mail.