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MYOB sold to Bain Capital

22 Aug 2011

US private equity organisation Bain Capital has purchased accounting software vendor MYOB after a larger bid from Sage Group stalled at the last hurdle.

Although the companies have not disclosed the value of the deal, reports estimate the sale price between AU$1.2 billion and AU$1.3 billion (NZ$1.52 billion and NZ$1.65 billion).

According to the Sydney Morning Herald, Bain Capital secured the purchase after a larger AU$1.35 billion (NZ$1.71 billion) offer from rumoured frontrunners Sage Group fell through.

The report says a late drop in Sage’s share price meant its bid was over 25% of its market capitalisation, meaning it would have required a lengthy approval process.

The sellers, Archer Capital, purchased MYOB along with consortium partner HarbourVest in 2009 for about AU$450 million (NZ$571.2 million).

MYOB boasts over one million customers in Australia and New Zealand.

Bain spokesman Walid Sarkis says MYOB has been the leader in the SMB financial software space for some time.

"The growth potential in this market is strong," Sarkis says, "with a growing trend of entrepreneurs starting up their own businesses."

Indeed, with the MYOB sale completed, attention has now turned to Reckon, with Australian Financial Review suggesting the company could be 'significantly underpriced'.

Rod Drury, CEO of Xero, recently criticised both MYOB and Reckon, as well as fellow competitor BankLink, for failing to keep up with advances in technology. Last week Xero received $4 million in R & D funding from the government as part of a technology innovation initiative.

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