Shares in Australia-based small business cloud accounting software company MYOB jumped as much as 20 percent Monday (Oct. 8) following reports it is considering a takeover offer by private equity firm KKR & Co.
Reports in The Sydney Morning Herald on Monday (Oct. 8) said MYOB is considering the $1.24 billion unsolicited offer from KKR, valuing MYOB at $2.61 per share. The acquisition attempt comes just months after the Australian Competition and Consumer Commission (ACCC) prevented a merger attempt between MYOB and another software company, Reckon. MYOB pulled out of the deal, which would have seen it acquire Reckon for $133.5 million, after the ACCC raised issues of the merger.
Following that block, other industry competitors saw opportunity in a disrupted small business accounting market.
MYOB also apparently saw opportunity in the failed merger. Now, as a potential takeover target, the company saw its shares at their highest since January. Reports said the offer is a 24 percent premium to the company’s previous closing share price of $2.11, and values MYOB at $1.54 billion.
Bain Capital owns an estimated 6.1 percent of MYOB, reports added.
Last year, MYOB also reached a deal to acquire Paycorp, a corporate payments company, for more than $37 million. At the time, the company’s CEO Tim Reed said the acquisition was part of the company’s efforts to broaden its corporate financial services offerings.
“We know from our clients that cash flow is consistently the number one pain point for small business operators, and we are delighted that we can bring together a solution that enables our clients to reduce administration time and costs to improve cash flow through the automation of payment services for their businesses,” he stated.
MYOB had previously revealed plans to adjust its strategy in an effort to provide more holistic financial services for its small business clients. It’s unclear how a takeover from KKR would affect that strategy.