Cloud accounting provider Reckon is selling a 120-person division to rival MYOB for $180 million as it looks to – in the words of Group CEO Clive Rabie – “narrow [its] focus on the small business accounting software market”.
Subject to regulatory approval by the ACCC and the NZCC, MYOB will acquire the assets of Reckon’s Accountants Practice Management division, which include three businesses (Reckon APS, Reckon Elite and Reckon Docs) that provide accounting, tax compliance and related software to more than 4000 small and large accounting practices in Australia and New Zealand. All clients, IP, systems and employees associated with the division are included in the purchase.
According to MYOB CEO Tim Reed, the acquisition will see MYOB strengthen its focus on ‘the critical adviser audience’ and, in this way, deepen the company’s relationship with accounting practices.
“At MYOB, we believe the future of the accounting industry is an exciting one – we refer to it as our Connected Practice vision,” he said. “In this future, we believe advisers will become even more important in the lives of their SME clients than they are today.
“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.”
With the sale of the Accountants Practice Management Division, Reckon have stated they will continue to focus on their Business division, which provides accounting software and solutions for small to large businesses, while pursuing opportunities in the legal market through their Legal Practice Management Division.
Reckon also stated that the Accountants Practice Management division represents less than half of the company’s total group revenue whereas the proceeds from the sale exceed current market capitalisation for the whole company, delivering additional value for shareholders.
“We are pleased to have signed a definitive agreement with MYOB to sell our Accountants Practice Management division,” said Clive Rabie, Group CEO at Reckon
“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.”
Reckon have advised that the sale is projected for completion by the second quarter of FY2018.