HFS Inc. said Wednesday it agreed to buy Jackson Hewitt Inc. for $480 million in cash, adding tax preparation to the financial services such as mutual funds and mortgages it can market.
Virginia Beach, Va.-based Jackson Hewitt, the largest tax preparer after H&R Block Inc., will join the stable of HFS brands such as Century 21, Coldwell Banker, Ramada Inn, Days Inn and Avis Rent-a-Car. The $68-a-share offer caps a 16-fold increase in Jackson Hewitt’s stock the last year.
Parsippany-based HFS wants to become a one-stop outlet for a Baby Boom generation that’s spending heavily on travel, real estate and financial services. Jackson Hewitt prepares about 1 percent of the 114 million tax returns filed every year; H&R Block accounts for 12 percent.
Shares of Jackson Hewitt skyrocketed $15.44, or 30 percent, to $66.94, in trading of 2.1 million shares, almost 12 times the three-month daily average. The offer is a 32 percent premium to Jackson Hewitt’s closing price Tuesday. HFS shares rose 25 cents, to $68.06.
