Posted
Accounting software firm MYOB is up for sale by its private equity owners and is attracting interest from British based Sage Group.
(Simon Palan)
Source: Lateline Business
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Duration: 2min 35sec
Topics:
accounting,
company-news,
australia
Transcript
TICKY FULLERTON, PRESENTER: Accounting software firm MYOB is set to become the latest Australian company to fall into foreign hands.
MYOB’s private equity owners are preparing to sell the business and British-based Sage Group has emerged at the most likely buyer.
At around $1.3 billion, it will be Australia’s third biggest private equity sale.
Simon Palan has more.
SIMON PALAN, REPORTER: London-listed business software group Sage has confirmed that it’s got its Australian peer MYOB in its sights.
NIGEL LAKE, POTTINGER: For both parties it’s a big deal. For Sage it would be something like 10 per cent of their market cap, so it’s a very significant strategic move.
SIMON PALAN: If the deal goes ahead, it could be worth about $1.3 billion. In 2009, MYOB was bought by private equity firm Archer Capital. It’s rumoured to have been looking to sell it now for some time.
NIGEL LAKE: Achieving exits has been quite challenging. I think a lot of private equity firms have to a degree relied on there being an IPO exit as a possibility. We’re in an environment where that is – has been very difficult for a time. It’s going to remain difficult. I don’t think that’s going to change. And finding a good trade buyer is the obvious solution to that.
KATHERINE WOODTHORPE, VENTURE CAPITAL ASSOC.: I think the current volatility on the stock market makes IPOs of concern, but even so, anybody looking to exit a portfolio company from a private equity portfolio at the moment would be looking at both options.
They’ll look at an IPO because that still might deliver the best result, but they’ll also look at a trade sale. And as we’ve been seeing over the last 12 months, they’ve been the ones that have turned out to be the best answer.
SIMON PALAN: Merger and acquisition activity more generally has been a lot slower than what was expected at the start of this year. Six months ago, 2011 was on track to be the best year for takeovers and IPOs since 2007.
More recently, boardroom caution has been heightened by renewed fears about the US recovery and Europe’s debt woes.
NIGEL LAKE: Companies are looking to make strategically significant acquisitions, but they remain very cautious. Generally they have the funding to do so, but they are looking very carefully at what really makes sense and what doesn’t.
SIMON PALAN: The strong Australian dollar will also have put off some foreign suitors. But some believe the sluggish MA activity of the past few months means some big deals could be around the corner.
KATHERINE WOODTHORPE: There is a bit of a build-up in the pipeline, as quite a number of investments were made some three or four-plus years ago. There’s obviously a bit of a pipeline of exits that are due from now onwards.
SIMON PALAN: Nigel Lake says neither the carbon tax nor the mining tax is likely to defer foreign investment.