Tags: H&R | Block | Sell | Consulting

H&R Block to Sell Consulting Unit for $610 Million

Tuesday, 23 Aug 2011 12:25 AM

 

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H&R Block said it signed a letter of intent to sell its consulting unit to McGladrey & Pullen for about $610 million, as the top U.S. tax preparer focuses on its core business.

H&R Block will finance about $65 million of the deal value as it looks to jettison the underperforming RSM McGladrey unit.

In June, H&R Block's new Chief Executive William Cobb told analysts that RSM's falling profit and revenue were a drag on the company's earnings, and that the unit and its troubles were on his "radar screen."

H&R Block bought RSM McGladrey in 1999 to diversify beyond filing tax returns.

However, after a successful proxy battle by hedge fund manager Richard Breeden in 2007, the company began to cut non-core operations, such as subprime lending and financial advisory, to return to its roots.

H&R Block said it expects to record a non-cash charge of about $53 million, or 17 cents a share, in the first quarter related to the sale and the closure of RSM's operations that are not part of the deal.

© 2014 Thomson/Reuters. All rights reserved.

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