According to news from The Australian Financial Review on Thursday (Nov. 16), Reckon Chief Executive Clive Rabie described the company’s sale of its accounting practice software unit to MYOB as losing the “jewel in the crown” of the company.
The acquisition, a deal reached for about $137 million, will need approval from both the Australian Competition and Consumer Commission and the New Zealand Commerce Commission. The takeover would see MYOB acquiring Reckon’s Accounting Practice Software unit as well as Reckon Elite and Reckon Docs.
The assets represent about half of Reckon’s total operations.
“We were absolutely convinced that we had the best technology, the best people and a very engaged client base,” Rabie told the publication. “But as time went by, we realized we needed to move to the cloud, and the cost of building out the technology, or the products, that was going to be suitable for our customer base would require a lot of investment, which quite honestly we didn’t have.”
“We thought that culturally MYOB and its commitment to the connected office were the people to partner with for our employees and customers,” he added.
Reckon shares spiked 25.6 percent following news of the plans; MYOB’s inched up 0.8 percent, according to reports.
In January of last year, Reckon announced its own takeover. The Australian SMB accounting business acquired SmartVault, a cloud-based document management company.
MYOB, meanwhile, previously reached a deal earlier this year to acquire Paycorp for $37 million. That deal was part of MYOB’s overall strategy to add new services for its corporate customers in the payments arena. According to MYOB CEO Tim Reed in February, the firm’s payments units PayDirect Mobile and PayDirect Online increased transaction volume on the MYOB platform by 64 percent in 2016.