Last week Reckon announced a proposal to demerge its document management division and list it on the AIM market of the London Stock Exchange (LSE) under an independent company, Document Management Newco.
Reckon’s business and practice management divisions, comprising of Reckon Accounts, Reckon One, Reckon Loans, Reckon APS, nQueue and Reckon Docs, will continue trading on the Australian Stock Exchange (ASX).
“The decision to demerge our business is the best course of action to unlock value from our increasingly diverse and complex range of operations. This represents a natural progression for Reckon as our business continues to undergo robust growth,” said Clive Rabie, Reckon CEO.
“At its core, it will allow us to refocus and tailor independent expansion strategies for each business to better pursue their strategic priorities at their own pace and discretion.”
Sam Allert, managing director for Australia and New Zealand at Reckon, said that the demerger will allow Reckon to focus on its core which has always been the accounting-based software.
“I’ve been going to management meetings where we talk about all and sundry. I’m really looking forward to going to a management meeting where we can talk about what is really our core, and that is accounting software for business and practice management for accountants,” Mr Allert told Accountants Daily.
“[We can] get really laser focused on that while the exec of the document management company can really get laser focused on document management.”
These plans are preliminary, conditional and subject to due diligence as well as any necessary regulatory approvals. According to Reckon, the ASX has indicated that shareholder approval is not required.
Based on indicative timings, Reckon expects the demerger and IPO to be completed before Q3 FY2017.
Following that, Reckon and Document Management Newco will work together to facilitate integration and transition, as well as ongoing support of document management solutions to accountants who are also clients of Reckon.
Mr Allert said that the demerger will have no change for accountants that use Reckon products.
“Document management is a key part of what we provide to accountants in Australia and New Zealand, and that has been sold and provided by, specifically the Reckon APS team,” he said.
“So we will continue distributing document management and providing that to our clients ongoing, and it remains not only an important part of what we've already given clients, it's also huge part of our future as well.”