Aussie MYOB parts with UK division for $77M

MYOB’s Chief Executive Officer, Craig Winkler said the decision to sell the UK and Ireland Accountants Division followed a strategic review of the company’s European operations in 2007 and approaches from third parties.

The MYOB Limited Board determined that shareholder value would be maximised by exploring the opportunity to obtain a premium price through a competitive sale process.

“Whilst we have successfully grown the UK and Ireland Accountants Division over recent years, operating in mature markets means that the market leaders hold a virtually unshakeable position. Through this sale we have converted our position as a relatively minor player in UK and Ireland into a very healthy cash price that will allow us to further maximise value to our shareholders,” he said.

According to Winkler the Accountants Division was responsible for 90 percent of UK and Ireland revenue and all of the profits. MYOB is now reviewing its position in relation to the UK Business Division and will announce the outcome of this review in due course.

“MYOB expects that net cash pre-tax proceeds resulting from the sale will be around $65 million and will review options post sale for further significant returns of capital to shareholders beyond those already announced to the market, together with redeployment of capital into higher growth opportunities,” he said.

Winkler claimed the sale of the operations is expected to give rise to a pre-tax accounting loss of around $17m in 2008 largely as a result of goodwill allocated on moving to the new International Financial Reporting Standards in 2004 at the time of the Solution 6 acquisition.

“With the sale of our UK and Ireland Accountants Division we have maximised the value to shareholders. We’re now evaluating our options for the loss making UK Business Division, with the aim of maximising shareholder value while also delivering strong outcomes for our clients and employees,” he said.

According to Winkler, MYOB’s international growth strategy is now very focused on Asia, and in particular China, where the market for small business solutions is largely fragmented, which means great opportunity in winning a ‘land grab’.

“MYOB has only ever sought to be in a selected number of international growth markets. Our ambitions have always been to forge deep and lasting relationships with business owners and accountants – building a leading market position around a brand and service proposition,” he said.

Helfen Corporate Advisory and KPMG Corporate Finance (UK) acted as joint financial advisors to MYOB Limited on this transaction, Winkler said.