The acquisition of business management software provider MYOB will strengthen the company’s CRM strategy and aid the growth of its portfolio, chief executive Tim Reed says.
Bain Capital, a Boston-based private equity firm with around $65 billion in assets under management, has purchased a majority stake in MYOB from buyout firms Archer Capital and HarbourVest Partners.
Financial terms of the transaction, including the purchase price, are confidential, although it’s believed Bain Capital sealed the deal for $1.2 billion after edging out frontrunner Sage Group.
MYOB’s management team, led by chief executive Tim Reed and general manager Julian Smith, will retain its stake in the business.
Smith told SmartCompany the MYOB team took the strong bidding for the business as an endorsement of its growth potential, but said customers would not see any differences under the new owners.
“There is absolutely no change. For us, it is very much business as usual. What it does do is bring additional resources from Bain Capital to support what we are doing,” he said.
The deal is a major coup for Archer Capital, which led a consortium buyout of the then-listed MYOB – an acronym for Mind Your Own Business – for $450 million in January 2009.
MYOB is considered the market leader in business management software, supplying more than one million businesses in Australia and New Zealand.
The company’s solutions enable business and accounting practices to streamline workflows, and foster seamless connections between businesses and their advisors.
Walid Sarkis, a managing director at Bain Capital, described MYOB as a “first class company with an attractive valuation” before highlighting its appeal among start-ups.
“It has [continued to be] the leader in the financial software space for SMEs in Australasia… The growth potential in this market is strong, with a growing trend of entrepreneurs starting up their own businesses,” Sarkis said in a statement.
Similarly, Craig Boyce, also a managing director at Bain Capital, said in a statement the firm is excited by the prospect of investing alongside MYOB’s management team.
“Together with Archer Capital, they have invested to enable the company to further meet the needs of customers, particularly through leading cloud-based capabilities,” he said.
Archer Capital is one of Australia’s leading private equity investment houses, with more than $2 billion in funds under management or advice.
It has worked extensively with MYOB to refocus the company’s operations, investing significant capital to expand and improve its core product offering and services.
Reed said in a company blog he is “incredibly proud” of MYOB’s achievements, but indicated the best is yet to come.
Reed said MYOB has refined its strategy to focus solely on Australian and New Zealand businesses, investing more than $75 million in its product portfolio for these markets.
“This has allowed us to launch our next generation of smarter, connected business solutions,” he said.
Businesses are able to access their accounts both online and offline, incorporate daily bank feeds reducing data entry, connect with their accountants, and build websites in less than 15 minutes.
“We have also lifted our client service levels… and we’ve invested in our team,” Reed said.
“I’m also excited about our new investors. Bain Capital has an excellent reputation as a firm that invests in high quality, client-oriented, growth businesses.”
“Bain’s experience in owning and guiding businesses like MYOB will assist us to deliver successful solutions to our clients… The MYOB leadership team won’t change, and I’ll have the opportunity to continue to lead the business.”
The final sale is likely to be completed in the next few months.
