Two of Australia's accounting software majors announce a $180 million deal.
Reckon has sold its accountants practice management division – comprising Reckon APS, Reckon Elite and Reckon Docs – to MYOB.
For Reckon, the $180 million deal will bring in more cash than the market thought the whole company was worth. The money will be used to pay off debt, and then to pay a special dividend to shareholders.
Before the recent de-merger of Reckon's document management division and the deal with MYOB, Reckon's business division (responsible for Reckon One, Reckon Accounts and Reckon Loans) and legal practice management division together represented about half of the company in terms of revenue and earnings.
“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 Reckon group CEO Clive Rabie.
The accountants practice management division has more than 4000 clients in Australia and New Zealand.
MYOB CEO Tim Reed described the acquisition as a significant move for his business.
“This acquisition brings us closer to the delivery of our connected practice vision, which will see advisers and SMEs working seamlessly through a single platform enabling real-time collaboration and improved outcomes, including cost and time efficiencies,” Reed said.
“Reckon's accountant group is strongly positioned to enable us to deepen our relationship with advisers, and provide an opportunity for us to apply our knowledge and experience in both the midmarket practice suite as well as leverage the development of our online accounting solutions.”
All of the more than 120 employees will move to MYOB, said Reed.
“We are excited to welcome the team from Reckon's accountant group. Collectively they bring fantastic expertise and insight in the adviser segment and we're delighted that they will help us bring to life this next exciting growth phase of our business.”
Subject to regulatory approval, the companies expect to complete the transaction by the second quarter of 2018.