Deloitte sells Abacus tax team to Thomson
Thomson Tax & Accounting announced that it is to acquire the Abacus tax software and business operations from Deloitte LLP. John Stokdyk reports.
The Abacus suite of products is used by corporations and their advisors for tax computations in the UK, Ireland, Netherlands, New Zealand, Hong Kong, while its VAT software is used in 20 European Union territories. Abacus also provides the software engine that underpins Sage’s Corporation Tax Advanced product.
“Abacus gives us global products to fit with our global strategy,” Thomson Tax & Accounting CEO Roy M Martin told AccountingWEB.co.uk.
“The tax laws in our key country markets are complex and multinational companies have many entities in those markets. Abacus also complements our national markets in Australia and the US. The European VAT product also fits nicely and can grow in time.”
The 40-strong Abacus team will remain based in London and represent the latest step in Thomson’s strategy to expand into the European market. When the transaction is completed, the company will have 150 employees in the UK.
While there will be some overlaps between the Abacus Corporation Tax products and that produced by Thomson’s other UK subsidiary, Digita, which it acquired in 2008, “Abacus is a perfect fit,” Martin said.
“Our objective is to integrate global products with local products, so customers can look to Thomson Reuters for those needs,” he said. “The Abacus customer base is the exact type of customer base we like and matches up with [Digita].”
While the Abacus team focuses on international accountancy firms and corporate tax software users, Digita specialises in serving UK firms, Martin explained. Digita’s technology grew from the small firm market, but has been robust enough to scale up to meet the needs of large firms including Bentley Jennison and KPMG. Abacus, meanwhile, caters for corporate users, high end accountancy firms and smaller practitioners.
The plan according to Martin is to link Abacus with Thomson’s other software and digital brands such as the ONESOURCE corporate tax portal and document management and workflow tools such as TaxStream, Paisley, and Checkpoint. But the question immediately arises about the degree to which Digita’s new stablemate will continue to integrate with the rival Sage Practice Solution.
“The headline for us with Abacus and all its customers is business as usual,” Martin said. “What we bring to table is increased product development and integration with global technology - that’s going to be unchanging or better. While he has not yet contacted Sage, he continued, “We’re happy with that relationship and will be reaching out to them when the transaction is complete.”
Francine McKenna, a sharp-eyed observer of Big Four machinations on her re: The Auditors blog site, offered a trans-Atlantic view of the deal: “With everything going on here, Deloitte is probably in the worst shape of the Big Four. Deloitte lost the most clients through failures and bailouts and are really hurting, with people being laid off in the US during the past two years.”
During tough times, the big firms have tended to retreat from repetitive, high volume and lower margin business areas - and that includes writing software, she suggested. Firms such as Deloitte “don’t have the infrastructure to support the software over the long term, because they’re not software companies. This may just be an opportunity for them to clear the decks and raise some money,” McKenna said.