inancial management software developer Intuit, Inc. has signed an agreement to acquire payment processor Innovative Merchant Solutions. The deal was announced on September 2, 2003 and is expected to close by the end of the month.

The acquisition of IMS will enable Intuit to expand the line of financial management tools it can offer to small businesses. Intuit has been actively executing a strategy to round out its offerings; beginning with QuickBooks for accounting, the company's products now include tools that help businesses manage all aspects of their operations, from accounting and taxes to payroll, benefits administration and retirement planning.

"The acquisition of IMS enables Intuit to strengthen our offering for a critical 'beyond-accounting' service - merchant account services," Steve Bennett, Intuit's President and CEO, said in a statement. "IMS enables us to expand from that base by providing merchants with an enhanced offering, including a broader range of payment options such as PIN debit card processing and swipe terminals."

Joe Kaplan, CEO of IMS, said in a statement, "Like Intuit, Innovative Merchant Solutions has grown and prospered because we understand our customers and focus on delivering services that dramatically simplify how they do business.

By combining the expertise and resources of both companies, we believe we can deliver even more value to customers - and more growth for Intuit."

Under terms of the agreement, Intuit will acquire IMS' entire equity, valued at up to $116 million in cash. IMS is profitable with a net revenue of $25 million and is expected to contribute to Intuit's revenue and profit growth. The company said the acquisition will enable Intuit to tap into the profitable merchant account services market, including debit and credit card processing.

Kaplan will continue to lead the IMS group, and the company's 110 employees will be asked to join Intuit. IMS has been in business since 1999 and offers a full range of merchant account services, targeted for small businesses.