Bowmark exits investment in Tax Systems to Providence Equity Partners

Founded in 1991, Tax Systems is a leading specialist provider of software and solutions which digitise the tax compliance process – enabling tax professionals to automate workflows, enhance compliance, mitigate risk and generate valuable insights from their tax function. The company now serves over 1,500 clients, including multinational enterprises, >80% of the top UK&I accounting firms, and approximately 40% of the FTSE 100.

Since Bowmark completed the take-private of the company from AIM in 2019, Tax Systems has doubled its revenue and profits. As a result of continued investment, the company has developed the industry’s leading, cloud-native, multi-tax technology platform.  Most recently, it launched Pillar2, its AI-powered SaaS solution to address the complexities of the OECD’s global Pillar Two compliance and reporting.

Providence’s investment will accelerate Tax Systems’ continued platform expansion and innovation, with new tax and regulatory compliance solutions in existing and new geographies.

Simon Kaufman, partner at Bowmark, commented: “We are proud to have supported the Tax Systems management team in the development of the business since 2019. The company has an exceptional reputation and, following significant investment in its product suite and a highly complementary international acquisition, there is much opportunity ahead.”

Bruce Martin, CEO of Tax Systems, said: “We have enjoyed an excellent and rewarding partnership with Bowmark, whose support has been instrumental in strengthening our position in core markets, expanding our product suite, and successfully entering new geographies. As we move into our next phase of growth, we are excited to be partnering with Providence, who recognise the strength of our business and the significant opportunities ahead. Their support will help us accelerate our expansion and innovation as we continue building the leading tax compliance software platform in EMEA.”

Karim Tabet, Senior Managing Director, Co-Head of Europe at Providence, commented: “We are excited by the opportunity to partner with Tax Systems. Throughout Bowmark’s ownership, the company has developed into a specialist leader in regulatory and compliance software. We believe this is a large and fragmented category, with constant changes and strong digitisation trends that provide potential for numerous growth avenues.”

Daniel Zwicky, Director at Providence, added: “We’ve followed Bruce Martin and the Tax Systems team for some time and are delighted to actively support their continued growth through organic platform innovation, enhancements to their product suite and commercial strategy, and through transformative acquisitions that drive value creation.”

Financial terms were not disclosed.

Providence was advised by Arma Partners (M&A); White & Case and A&O Shearman (Legal); Plural Strategy (Commercial); FTI Consulting (Financial); RingStone (Technical); and EY (Tax).

Bowmark was advised by Houlihan Lokey (M&A); Stephenson Harwood and NautaDutilh (Legal); OC&C (Commercial) and Deloitte (Financial, Tax and Technology).

Tax Systems was advised by Arrowpoint Advisory (M&A) and Burness Paull (Legal).