Avantax (NASDAQ:AVTA) shares surged by nearly 26% in the morning session today after the financial planning and wealth management services provider agreed to be acquired by Cetera Financial Group for $26 per share. The total transaction value, including Avantax’s net debt, is estimated at $1.2 billion.
The acquisition price represents a 30% premium over Avantax’s closing price on September 8. At the end of June 2023, the company had $83.8 billion in assets under administration and $42.6 billion in AUM (Assets Under management). Upon the closing of the transaction, Avantax will function as a standalone unit under the Cetera umbrella.
The addition of Avantax is expected to boost Cetera’s capabilities in wealth management and tax planning while also establishing a strategic relationship between Cetera and Fidelity. This, in turn, could help Cetera expand further into a multi-custodial platform.
The transaction has received unanimous approval from Avantax’s Board and is anticipated to close by the end of this year. Upon closing, Avantax will transition into private ownership.
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With today’s price gains, Avantax shares have now gained nearly 26% over the past five sessions.
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