MYOB swoops on Solution 6
MYOB is scooping up Solution 6, a fellow Australian business software firm, in a share swap worth AUS$234m (US$175m). Solution 6 shareholders will end up with 33 per cent of the enlarged group.
At the same time Solution 6 is selling off its US-based enterprise and consulting business to private equity firm Francisco Partners, for AUS$34m (US$25.3m).
The merged business will have pro forma revenues of AUS$180m (US$134m) and will be free of debt. It expects annual post-consolidation cost-savings of AUS$10m-$12m (US$7.5m-$9m) "within three years". This looks like a very leisurely timetable.
MYOB makes tax and payroll software, so Solution 6's accounting, compliance and training divisions will be a nic4 bolt-on. It also takes MYOB into some useful vertical markets. Solution 6 specialises in practice management software for professional service types - lawyers, management consultants and accountants. It claims six of the world's top 20 law firms, including the two biggest, as customers.
The company bought 12 per cent of Solution 6 last year, with the intention of assuming full control of the company. But recent terrible financial news coming out of Solution 6 has accelerated the takeover.
MYOB is to ditch the Solution 6 brand and also the firm's top execs, after a changeover period, according to Australian reports.
It operates directly in Australia, New Zealand, the US, the UK, Hong Kong, Singapore, Malaysia and through disties in Latin America, Southern Africa and the Philippines.
The Solution 6 deal is expected to close within six months and is subject to the usual regulatory conditions. ®