MYOB forks out $180M for Reckon's accounting management practice

MYOB forks out $180M for Reckon's accounting management practice

Reckon will still retain its Business and Legal Practice Management divisions

Tim Reed - CEO, MYOB

Tim Reed - CEO, MYOB

MYOB (ASX:MYO) has coughed up $180 million in cash for Reckon's (ASX:RKN) Accountants Group, as it works to focus on the smaller end of the market.

Under the deal, MYOB will take on all clients, intellectual property, systems, processes and more than 120 employees from its fellow publicly-listed accounting software vendor.

Reckon will retain its Business and Legal Practice Management divisions, which make up about 50 per cent of its group revenue and EBITDA.

According to Reckon, the move will help accelerate its long-term strategy to offer small businesses a complete suite of cloud solutions as well as pursue opportunities in the legal market. 

Reckon Group CEO, Clive Rabie, said combining the two businesses that are strategically and culturally aligned under the MYOB group, presented a compelling opportunity and long-term benefits for clients, staff and investors.

“With the resources afforded by MYOB, we are confident the team will continue to be a trusted partner and strategic adviser to new and existing clients,” Rabie said.

“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.”

The Accountants Practice Management division includes three product lines - Reckon APS, Reckon Elite, and Reckon Docs that provide accounting, tax compliance and related software to more than 4000 large and small accounting practices in Australia and New Zealand.

The deal delivers additional shareholder value at 35 per cent above market cap, exceeding market cap for the whole Reckon Group. Proceeds will be used to pay off its debt and a special dividend will also be paid to shareholders. 

MYOB CEO, Tim Reed, said the acquisition will accelerate the delivery of its online practice suite to bring advisers online faster and provide an online migration path for Reckon's clients to the MYOB platform. It plans to use the earnings contribution from Reckon in the first two years to fund its investment in sales and marketing of its online SME and practice tools.

“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,” Reed said. 

The sale will be completed by the second quarter of FY18 subject to approval from the Australian Competition and Consumer Commission (ACCC) and the New Zealand Commerce Commission (NZCC) regulatory processes.

Earlier in the year, MYOB (ASX:MYO), bought payment solutions company, Paycorp for $48 million and in August 2016, it also purchased Kiwi ERP software vendor, Greentree, for $NZ28.5 million.

In the 12 months ending 31 December 2016, Reckon achieved $97.8 million in revenue (up seven per cent) and EBITDA was $35.3 million (down four per cent). Net profit was $11 million down 25 per cent. 

Reckon’s Business Division, which generated $35 million in revenue, maintains a network of more than 700,000 small businesses and features business accounting and personal wealth management software and solutions such as Reckon One, Reckon Accounts and Reckon Loans.

Its Legal Practice Management Division ($13 million revenue) predominantly operates in the US and UK, specifically focusing on print and scan solutions – nQueue Billback.

The latest move follows the de-merger of Reckon’s Document Management division and subsequent listing on the AIM market of the London Stock Exchange GetBusy (AIM:GETB), as part of the company’s ongoing journey and long-term strategy to unlock shareholder value.

Follow Us

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags MYOBTim ReedReckonClive Rabie



The making of an MSSP: a blueprint for growth in NZ

The making of an MSSP: a blueprint for growth in NZ

Partners are actively building out security practices and services to match, yet remain challenged by a lack of guidance in the market. This exclusive Reseller News Roundtable - in association with Sophos - assessed the making of an MSSP, outlining the blueprint for growth and how partners can differentiate in New Zealand.

The making of an MSSP: a blueprint for growth in NZ
Reseller News Platinum Club celebrates leading partners in 2018

Reseller News Platinum Club celebrates leading partners in 2018

The leading players of the New Zealand channel came together to celebrate a year of achievement at the inaugural Reseller News Platinum Club lunch in Auckland. Following the Reseller News Innovation Awards, Platinum Club provides a platform to showcase the top performing partners and start-ups of the past 12 months, with more than ​​50 organisations in the spotlight.​​​

Reseller News Platinum Club celebrates leading partners in 2018
Meet the top performing HP partners in NZ

Meet the top performing HP partners in NZ

HP has honoured its leading partners in New Zealand during 2018, following 12 months of growth through the local channel. Unveiled during the fourth running of the ceremony in Auckland, the awards recognise and celebrate excellence, growth, consistency and engagement of standout Kiwi partners.

Meet the top performing HP partners in NZ
Show Comments