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Accounting software vendor Intuit Inc. is continuing to expand its small business offerings, late Monday announcing a $170 million agreement to acquire Homestead Technologies Inc., which offers Web design tools and hosting services.

The target serves small businesses with Web hosting, design and ecommerce tools, and online marketing services. Homestead has raised a total of $37.4 million in venture capital. According to the company's Web site, its last funding round came in the form of a $5.4 million Series E in 2002 from Institutional Venture Partners, Meritech Capital, Draper Fisher Jurvetson and several others.

The deal reflects Intuit's renewed interest in acquisitions as a way to drive growth. The company earlier this year closed its biggest acquisition to date-- the $1.3 billion purchase of online banking services provider Digital Insight Corp. Intuit also attempted to add payments processing to its small business customers by buying Electronic Clearing House Inc. about a year ago, but the $142 million deal failed after the target became subject of a federal online gambling investigation.

Intuit M&A chief Alex Lintner told The Deal a few months ago that the company would strike another payments processing deal by year-end. The Homestead deal obviously isn't it, but it's a deal that seemed almost destined to happen. After all, Homestead's flagship product is called QuickSites, and that ought to fit nicely with QuickBooks and Quicken, two of Intuit's hottest accounting software offerings. - Olaf de Senerpont Domis

Meanwhile, Homestead CEO Justin Kitch sounded slightly shellshocked in his post discussing the deal, while emphatic that the acquisition benefits customers, employees and investors alike. "You have to understand that when you start a company in your bedroom because you don't want to work for "the man," it is quite exhilarating (and a bit amusing) the first time another company comes along and offers to pay you a lot of money for what you've created." - Olaf de Senerpont Domis

See Nov. 26 press release from Intuit.com
See Sept. 21 story from The Deal newsweekly
See Nov. 26 post from Homestead CEO Justin Kitch
See Nov. 26 post from Screenwerk

 

 

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