Sage has confirmed it is considering a bid for the Australian business software company, MYOB in a deal that could be worth over £600m.
The confirmation means an end to Sage’s three year absence from the mergers and acquisitions market. In May, the company’s CEO Guy Berruyer said mergers and acquisitions remained part of Sage’s wider business strategy.
MYOB’s current owners are private equity companies, Archer Capital and HarbourVest Partners which acquired the firm back in 2008 for A$450m (£287.5m). According to Reuters, sources have suggested Sage Group has already made its final bid for the company.
The Australian reports that MYOB is currently generating earnings before interest, tax, depreciation and amortisation of AUS$105m and is predicting a sale price of between AUS$1.2bn and 1.3bn - 11.4-12.4 times earnings.
The announcement gives an insight to how MYOB's fortunes have declined in recent years and illustrates what can happen to also-rans in the global accounting software market. There were signs that all was not quite right in 2008 when the company pulled out of the UK, selling its practice software wing to CCH and taking £1.8m off Mamut for the remaining SME accounting business. The thinking behind this move was to allow MYOB to concentrate on the Far East market.
Shares of Sage Group on the FTSE 100 are currently trading down 1.85% on the day at 244.59.