Global tax software provider Sovos have announced it has acquired Accordance, a U.K.-based value-added tax (VAT) managed services company.
Accordance has been a Sovos partner since 2018 and has implemented Sovos VAT Reporting software to provide technology-enabled compliance services to its clients.
The acquisition comes at a critical moment for VAT countries, where businesses face a range of new regulatory mandates, from changes in periodic reporting to continuous transaction controls (CTCs). Companies need to stay flexible during this global, digital transformation of tax, making both managed services and software essential. Sovos’ third acquisition of 2020 will help customers doing business in Europe easily navigate the transition ahead.
Technology is creating opportunities to streamline the integration and analysis of transaction data, enabling both business optimisation and government tax control.
Technology-enabled managed services give companies the agility to pivot resources as needed in response to these changing tax compliance demands. By combining both companies’ managed services, Sovos can accelerate the introduction of intelligent data integration and data quality dashboards coupled with cloud interfaces for customers to more easily manage any VAT compliance model as regulations evolve.
“Accordance adds a leading service provider with a robust customer base and unique VAT expertise to our growing European organisation, strengthening the foundation for future global expansion,” said Andy Hovancik, CEO, Sovos. “With this acquisition, Sovos substantially increases our operations in Europe, where we already enjoy significant scale with more than 2,000 customers being served in the region.”
In addition to supporting companies that engage in business-to-business transactions in the region, Sovos’ expanded VAT managed services reflect increasing compliance demands and risk for global companies selling into Europe.
The EU 2021 E-commerce VAT Package will mark a transformation in how sellers and platforms outside the EU can import goods sold to European consumers beginning on July 1, 2021.
Designed to close VAT collection gaps on transactions of every size, this e-commerce legislation will require many e-commerce platforms and direct-to-consumer vendors to appoint intermediaries — often managed services providers — to file VAT returns on their behalf. U.K. companies may also be affected by this legislation through the Brexit transition.
Lucy Franklin, CEO of Accordance said, “VAT legislation is complex and constantly changing, and businesses need the support of both managed services and technology to trade confidently across Europe. As a global company focused on the full scope of VAT compliance needs, Sovos represents an opportunity for our clients, with a single partner for tax compliance everywhere they do business.”
“European countries are eager to increase revenue collection on the rapidly growing value of cross-border e-commerce purchases, leading to significant changes in the way VAT and customs duties will be enforced,” said James Buckley, managing director, Europe, Sovos. “With a broad portfolio of complete, connected software-and-service offerings, Sovos offers unmatched value for a growing number of organisations around the world.”
John Gledhill, vice president of corporate development for Sovos, said, “With an API strategy bolstered by the acquisition of TrustWeaver in 2018, an SAP centre of excellence reinforced by the acquisition of Foriba in 2019, and now an expansive managed services team multiplied by the acquisition of Accordance, Sovos continues to advance in its strategic plan to help companies Solve Tax for Good.”
The terms of the deal were not disclosed. Sovos is owned by Hg, the London-based specialist private equity investor focused on software and service businesses. EY served as financial advisor to Sovos, and Burness Paull provided legal counsel. RSM served as financial advisor to Accordance, and DMH Stallard provided legal counsel.
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