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Blucora closes acquisition of HK Financial Services

🕐 2 min read

Company Increases Existing Credit Facility in Conjunction with Transaction

Blucora Inc. (NASDAQ: BCOR), an Irving-based  provider of data and technology-driven tax software and wealth management solutions, has announced it closed the acquisition of HK Financial Services, a fast-growing, CPA-focused registered investment advisor, for an upfront purchase price of $100 million.


“This highly complementary acquisition enables us to expand the ways we can work with CPA firms and tax professionals to deliver wealth management services to their clients,” said Chris Walters, Blucora’s president and Chief Executive Officer. “At the same time, we believe that we’re adding a fast-growing, highly profitable RIA business that increases our addressable market and enhances Blucora’s growth opportunities.”


In connection with the acquisition, Blucora entered into a $175 million of add-on term loan in the form of a fungible increase to its existing credit facility. The interest rate on the now $564.1 million term loan is a floating rate based on LIBOR plus 4%.
The company used $100 million of the proceeds from the term loan to pay the purchase price of the HK Financial Services acquisition, and the additional proceeds of $75 million above the upfront purchase price, net of fees and expenses, are expected to remain on the company’s balance sheet for additional working capital.
In connection with the closing of the acquisition, the company awarded Louie Rosalez, president of HK Financial Services, 13,134 restricted stock units and a non-qualified stock option representing the right to purchase 35,464 shares of common stock, each pursuant to the Blucora Inc. 2016 Inducement Plan, as amended.


Both the restricted stock units and the shares underlying the non-qualified stock option will vest in three equal annual installments beginning on the first anniversary of the date of grant. The exercise price per share for the non-qualified stock option is equal to the closing price of the company’s common stock on the date of grant.
The awards were approved by the Compensation Committee of the Board of Directors of the company and were granted as an inducement to Rosalez entering into employment with the company in accordance with NASDAQ Listing Rule 5635(c)(4).
PJT Partners served as capital markets advisor to Blucora in connection with the financing associated with this transaction, and Haynes and Boone LLP served as legal counsel to Blucora in connection with the financing and the transaction.
– FWBP Staff

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