Intuit Buys Homestead, Whose CEO is 'Exhilarated'

Accounting software vendor Intuit Inc. (INTU) 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.

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."

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

Comments

[Todd Donald]

I cannot stress enough, how this news effects me personally. I have been a Homestead Customer from the beginning and have invested $1000's in monthly fees over the past five or six years. My interest goes beyond "investment" however... I stayed with Homestead (even though many companies offer better for less), because I believed in them, I rallied for the under-dog and I appreciated that they had provided me with the means to make sites and make money over the years.

Today's news of this acquistion by Intuit (who is in my humble opinion - The biggest gropup of idiots assembled under one name), is a shell shock indeed. As someone who has experienced corporate takeovers and acquistions first hand and second hand before... I can only say that I feel pain for the employees who have put their passion, their lives and hard-work into Homestead, believing in the dream that Justin Kitch had, only to now find out that they will soon be consumed by Intuit, or more likely lose their jobs after Intuit is finished with it's takeover. I truly pity the Homestead customers which have invested time and money into Homestead, only to have Justin sell it off, like an old set of tires.

As for me, I only wish Justin could have hired a better money-manager to avoid having to sell his "Baby", to pay for his bills. I am in the process of deleting domains and moving sites to other hosting companies before I too become part of Intuit's shareholder earnings!

[User 126319]

I cannot stress enough, how this news effects me personally. I have been a Homestead Customer from the beginning and have invested $1000's in monthly fees over the past five or six years. My interest goes beyond "investment" however... I stayed with Homestead (even though many companies offer better for less), because I believed in them, I rallied for the under-dog and I appreciated that they had provided me with the means to make sites and make money over the years.

Today's news of this acquistion by Intuit (who is in my humble opinion - The biggest gropup of idiots assembled under one name), is a shell shock indeed. As someone who has experienced corporate takeovers and acquistions first hand and second hand before... I can only say that I feel pain for the employees who have put their passion, their lives and hard-work into Homestead, believing in the dream that Justin Kitch had, only to now find out that they will soon be consumed by Intuit, or more likely lose their jobs after Intuit is finished with it's takeover. I truly pity the Homestead customers which have invested time and money into Homestead, only to have Justin sell it off, like an old set of tires.

As for me, I only wish Justin could have hired a better money-manager to avoid having to sell his "Baby", to pay for his bills. I am in the process of deleting domains and moving sites to other hosting companies before I too become part of Intuit's shareholder earnings!