MYOB pays a premium for Reckon division

Published on the 16/11/2017 | Written by Donovan Jackson

‘Connected Practice’ strategy announced to drive A/NZ growth…

MYOB’s acquisition spree continues, with the business software company purchasing rival Reckon’s Accountants Practice Management division in an all-cash sale of AU$180 million.

In a statement, Reckon said the sale will allow for a continued focus on its Business division. It said it will seek to offer small businesses a complete suite of cloud solutions, while pursuing opportunities in the legal market. The sale will also almost halve Reckon; MYOB is buying at a premium, with the proposed sum for the transaction exceeding current market capitalisation for the whole Reckon Group (AU$137 million).

In recent years, MYOB has acquired multiple companies, including mid-market ERP provider Greentree, payroll providers PayGlobal, IMS and Ace Payroll and bank feed integrator BankLink.

In its own statement, MYOB said its latest buy demonstrates commitment to the role advisers will play in the future of the accounting industry; it has around 1.2 million businesses using its software in New Zealand and Australia, and said acquisition will ‘deepen its relationship with more than 3,000 accounting practices, with the purchase including all clients, IP, systems and employees associated with Reckon’s Accountant Group’.

MYOB CEO Tim Reed: “The Reckon Board, management and staff have built a strong business around advisers, the most important providers of recommendations of business solutions for small and medium enterprises (SMEs)…we believe the future of the accounting industry is an exciting one; we refer to it as our Connected Practice vision. In this future we believe advisers will become even more important in the lives of their SME clients than they are today.”

Reckon’s Accountants Practice Management division includes three operating businesses (Reckon APS, Reckon Elite, and Reckon Docs) that provide accounting, tax compliance and related software to large and small accounting practices.

The sale will see MYOB take over the complete portfolio of clients, intellectual property, systems and processes, as well as all 120+ employees under the Accountants Practice Management division, including sales and support teams.

“The move marks a significant step forward for Reckon, as we look to narrow our focus on the small business accounting software market, further fuelling momentum in an area that’s rife with untapped opportunities especially as more enterprises look to the cloud,” said Clive Rabie, Group CEO at Reckon in the company’s statement.

The sale is projected for completion by the second quarter of FY2018, with finalisation conditional and subject to Australian Competition and Consumer Commission (ACCC) and the New Zealand Commerce Commission (NZCC) regulatory processes.

“The Reckon Board, management and staff have built a strong business around advisers. We’re looking forward to the next exciting phase of our business, bringing to life our vision of the Connected Practice and delivering connectivity, efficiencies and growth opportunities to advisers and SME businesses across Australia and New Zealand,” added Reed.

“With the resources afforded by MYOB, we are confident the team will continue to be a trusted partner and strategic advisor to new and existing clients. Importantly, we believe that combining two businesses that are strategically and culturally aligned under the MYOB group presents a compelling opportunity and long-term benefits for our clients, staff and investors,” said Rabie.

Reckon and MYOB will continue working closely together through and following the transaction to ensure a smooth transition for all clients and employees.

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