Jackson Hewitt Appoints New CEO, Shares Soar

Jackson Hewitt Tax Service announced on Thursday that it has hired Harry Buckley, former head of H&R Block to replace CEO Michael Yerington. New CEO Buckley promptly engaged Goldman Sachs "to examine strategic alternatives." The investment world answered the new CEO and the announcement with a 47 percent boost in its sagging stock price on Friday.

"The hiring of an investment bank to pursue strategic alternatives creates a call option over the coming months that a transaction could be announced," Oppenheimer & Co analyst Scott Schneeberger said in a note.

Outgoing Yerrington, promoted at the end of 2007 from his position of COO, was popular among franchisees because of several innovative moves in empowering franchisee associations and listening. The new management is eager to portray continued goodwill and confidence from store owners by having someone with experience in the industry at the helm.

... While a change in management had been anticipated, Schneeberger said his checks with franchisees showed an encouraging boost to morale. "Most important is the newly introduced potential for renewed hope in Jackson Hewitt's franchisee base with 'a proven tax guy' at the helm," he said. He set a $7.50 target on the stock. - Reuters

Part of the forces pushing this change is that Jackson Hewitt's network of franchised and company-owned offices prepared 13 percent fewer tax returns in 2009 because of the disruptive technology of more customers filing online and first-season customers looking for lower prices and more value in tax preparation services.