Bain Agrees to Buy Software Maker MYOB From Archer Capital, Beating Sage
Bain Capital LLC agreed to buy MYOB Pty Ltd., an Australian maker of business-management software, for an undisclosed sum as it seeks to benefit from faster- growing Asia-Pacific economies.
Boston-based Bain will buy a majority stake in MYOB from buyout firms Archer Capital and HarbourVest Partners LLC, the companies said in an e-mailed statement yesterday. The deal is valued at about A$1.2 billion ($1.2 billion), according to a person familiar with the transaction, who asked not to be named because the information isn’t public.
Bain is investing in Australia after successfully announcing its sale of a similar Italian company this month. MYOB, an acronym for Mind Your Own Business, was acquired by Archer in 2009 for A$382 million and is Australia’s largest independent software vendor, according to the statement. MYOB software is used by more than one million small businesses in Australia and New Zealand, according to its website.
“MYOB is a first-class company with an attractive valuation,” Walid Sarkis, a managing director at Bain, said in the statement. “It has been the leader in the financial software space for small and medium-sized enterprises in Australasia for a very long time. The growth potential in this market is strong, with a growing trend of entrepreneurs starting up their own businesses.”
Executives of MYOB will keep a stake in the Melbourne-based company, the statement said.
Bain acquired TeamSystem SpA, an Italian business management software group in 2004, and this month said it will sell the company to HgCapital, a London-based private-equity firm, for about 565 million euros ($809 million), including debt. According to Bain, TeamSystem has doubled revenue and earnings before interest, tax, depreciation and amortization since its takeover.
MYOB adds to Bain’s portfolio of business-services companies, including WorldPay, which processes electronic payments; Suntel, a Japanese communications-equipment provider; and Brakes Group, a food distributor in the U.K. and France.
Micro Focus International Plc (MCRO), a U.K. software provider that said in May that it was approached by private-equity funds including Bain and Advent International Corp., today said it ended takeover discussion and will instead resume a share buyback program.
On Aug. 19, people with knowledge of the matter said Sage Group Plc (SGE), the U.K.’s biggest software maker, was close to buying MYOB for about A$1.3 billion.
Sage, which has made at least 10 purchases since 2008, has said acquisitions are “back on the agenda.” Sage rose as much as 2.5 percent to 241.8 pence and traded at 241.2 pence at 3:52 p.m. in London. The stock has fallen 4.7 percent since it said on Aug. 16 that it is considering buying MYOB.
“Since acquiring the business in February 2009, we have worked with management to refocus MYOB’s operations and have invested significant capital,” Andrew Gray, a partner at Archer Capital, said in the statement. That has almost doubled “the business’s earnings base,” he said.
Archer Capital was advised by UBS AG while Morgan Stanley worked for Bain Capital.
In the past five years, there were more than 970 takeovers of European software companies, amounting to over $31 billion in deals, according to data compiled by Bloomberg. The largest was SAP AG (SAP)’s 2008 purchase of Business Objects SA. Buyers have paid a median multiple of 10.8 times the targets’ earnings before interest, taxes, depreciation and amortization, based on 70 deals.
Last month, Paris-based Cap Gemini SA (CAP) completed the purchase of Prosodie SA, a maker of software for e-commerce and telecommunications in a deal valued at 382 million euros.
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