Eagle timesheet company TSheets is acquired by Intuit

Eagle timesheet software manufacturer TSheets Inc. has been acquired by Intuit Inc., the Mountain View, Calif., company that produces software such as TurboTax and Quickbooks, for $340 million.

“We have been long-time partners with Intuit, going all the way back to 2012,” said Matt Rissell, CEO of TSheets, on Dec. 4. His products are integrated with those of Intuit, and the companies have 17,000 customers in common. And employees work together at almost every level of the organization, he said. “I consider [Intuit CEO] Brad Smith a mentor. They reached out and said, ‘Matt, would you consider….?’ And I said, ‘I get this question a lot, but certainly.’”

If Rissell gets this question a lot, what made this offer different? “When you’re a company growing as fast and efficient as we are in a really big market, it’s very attractive. It’s a good opportunity,” he said. “We already have roughly half of our customers connected to each other. It’s the right thing for our employees, and the right thing for our accountant partners.”

TSheets had one $15 million round of series A funding in September 2015 from Summit Partners. Rissell wouldn’t disclose what share of TSheets they owned, but said they would be bought out with the acquisition.

Idaho high-tech acquisitions by big, out-of-state companies haven’t always gone so well. In 2006, ProClarity Corp. was purchased by Microsoft for an undisclosed price, but the final version of its product came out in 2007, and in 2012, 30 to 40 of its software engineering jobs of its 100 Boise employees were moved to Washington. “I’m fully aware of that,” Rissell said. “This is very different.”

Rissell said he expects TSheets to remain in Eagle and that all of its 260 employees are receiving offers from Intuit. That includes him; he will be taking on the role of vice president and segment leader on the small business team, reporting to Alex Chriss, senior vice president, chief product and platform officer for Intuit’s Small Business and Self-Employed Group. “I am not going anywhere,” he declared. In fact, he expects to add at least 100 employees to the company in the next year, he said.

Coincidentally, WhiteCloud Analytics – a healthcare software company founded in 2009 by ProClarity’s former president and chief executive officer Bob Lokken – was sold in June to Relias Learning, a North Carolina healthcare analytics company, for an undisclosed price.

The TSheets transaction is valued at approximately $340 million of cash and other consideration – Rissell wouldn’t specify what that was or what the breakdown was — and is expected to close in the second fiscal quarter of fiscal 2018, which would be by February 1 based on Intuit’s fiscal calendar. The transaction is expected to have no material impact on Intuit’s earnings guidance for second quarter and full fiscal year 2018.

Intuit’s most recent quarterly earnings, announced November 20, were revenue of $886 million, up 14 percent year over year, and beating analysts’ expectations of $855 million. The company is paying a quarterly dividend of $0.39 per share on January 18, an increase of 15 percent over the previous year. In particular, the small business and self-employed revenue grew 17 percent in the quarter, up from 14 percent the previous year. The company also repurchased $170 million of its shares in the first quarter, and expects second quarter revenue growth of 14 to 16 percent. However, analyst reaction has been mixed, with companies such as Zacks Investment Research and Raymond James Financial downgrading its performance, and companies such as Wells Fargo and William Blair rating it as “outperform.”