Bain Capital buys Big
Private equity firm Bain Capital has clinched a deal to buy Australian accounting software company MYOB for about $1.3 billion, trumping UK's Sage Group and Kohlberg Kravis Roberts & Co. The deal is Bain's biggest acquisition in Australia, and gives the Boston-based buyout company a majority stake in the country's leading business software developer.
The Target
MYOB specializes in small and medium enterprises (SMEs), a sector which Bain said has strong growth potential, as more entrepreneurs are starting up businesses. "It has been the leader in the financial software space for SMEs in Australasia for a very long time with a strong proposition on customer's needs. The growth potential in this market is strong, with a growing trend of entrepreneurs starting up their own businesses," said Walid Sarkis, a managing director at Bain.
The Deal
MYOB, an abbreviation of the phrase 'Mind Your Own Business', was being sold by Archer Capital and HarbourVest Partners LLC, which bought it for about A$450 million in 2008. Bain agreed to buy MYOB for about A$1.2 billion ($1.3 billion) though the companies declined to provide the deal value. The Bain deal values MYOB at around 11.3 times earnings before interest, tax, depreciation and amortization (EBITDA), around 10 percent below the failed Sage bid but comparable to similar recent deals in the sector. In 2010, KKR paid around 12.5 times EBITDA for a majority stake in accountancy software vendor Visma, while HG Capital bought Italy's TeamSystem for 11.3x EBITDA
Bain's winning bid for MYOB was backed with a A$525 million financing from Bank of America Merrill Lynch, Deutsche Bank, HSBC, Morgan Stanley, National Australia Bank, Westpac Banking Corp and UBS, according to a source familiar with the matter.
UBS advised Archer and HarbourVest. Morgan Stanley advised Bain. Law firm Ropes & Gray LLC were international counsel to Bain.
The bulk of Bain's Asia assets are in Japan and Greater China. MYOB would be its third and largest Australia/New Zealand portfolio company.
Sage Deal Scuppered
Sage had entered exclusive talks with MYOB's private equity owners, after outbidding its rivals with an offer of about A$1.4 billion, sources said previously. But a drop in its share price and the need for shareholder approval forced the company to abandon its bid, sources said.
The failure to secure of MYOB is a blow for Sage, which has pursued a number of software companies only to be outbid by private equity groups.
Accounting software business popular with Private Equity players
MYOB is the latest in a string of accounting software companies to be sold, including Iris Software, Computer Software Group and Addison Software.
Private equity firm Bain Capital has clinched a deal to buy Australian accounting software company MYOB for about $1.3 billion, trumping UK's Sage Group and Kohlberg Kravis Roberts & Co. The deal is Bain's biggest acquisition in Australia, and gives the Boston-based buyout company a majority stake in the country's leading business software developer.
The Target
MYOB specializes in small and medium enterprises (SMEs), a sector which Bain said has strong growth potential, as more entrepreneurs are starting up businesses. "It has been the leader in the financial software space for SMEs in Australasia for a very long time with a strong proposition on customer's needs. The growth potential in this market is strong, with a growing trend of entrepreneurs starting up their own businesses," said Walid Sarkis, a managing director at Bain.
The Deal
MYOB, an abbreviation of the phrase 'Mind Your Own Business', was being sold by Archer Capital and HarbourVest Partners LLC, which bought it for about A$450 million in 2008. Bain agreed to buy MYOB for about A$1.2 billion ($1.3 billion) though the companies declined to provide the deal value. The Bain deal values MYOB at around 11.3 times earnings before interest, tax, depreciation and amortization (EBITDA), around 10 percent below the failed Sage bid but comparable to similar recent deals in the sector. In 2010, KKR paid around 12.5 times EBITDA for a majority stake in accountancy software vendor Visma, while HG Capital bought Italy's TeamSystem for 11.3x EBITDA
Bain's winning bid for MYOB was backed with a A$525 million financing from Bank of America Merrill Lynch, Deutsche Bank, HSBC, Morgan Stanley, National Australia Bank, Westpac Banking Corp and UBS, according to a source familiar with the matter.
UBS advised Archer and HarbourVest. Morgan Stanley advised Bain. Law firm Ropes & Gray LLC were international counsel to Bain.
The bulk of Bain's Asia assets are in Japan and Greater China. MYOB would be its third and largest Australia/New Zealand portfolio company.
Sage Deal Scuppered
Sage had entered exclusive talks with MYOB's private equity owners, after outbidding its rivals with an offer of about A$1.4 billion, sources said previously. But a drop in its share price and the need for shareholder approval forced the company to abandon its bid, sources said.
The failure to secure of MYOB is a blow for Sage, which has pursued a number of software companies only to be outbid by private equity groups.
Accounting software business popular with Private Equity players
MYOB is the latest in a string of accounting software companies to be sold, including Iris Software, Computer Software Group and Addison Software.
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