Reckon will sell its accountants practice management division to MYOB in an all-cash sale of $180 million with the company shifting its focus onto the business division of the company. Reckon will continue to retain its legal practice management divisions also.
The accountants practice management division includes three operating businesses including Reckon APS, Reckon Elite and Reckon Docs, which provide accounting, tax compliance and related software to more than 4,000 large and small accounting practices in Australia and New Zealand.
While the accountants practice management division represents less than half of the company’s total group revenue, the proposed proceeds from the sale exceeds current market capitalisation for the whole Reckon Group.
“The sale will see MYOB take over the complete portfolio of clients, intellectual property, systems and processes, as well as all 120+ employees under the accountants practice management division, including sales and support teams, ensuring that it is business as usual for all clients, staff and investors,” Reckon said in a public statement.
The sale is projected for completion by the second quarter of FY2018. Finalisation of the transaction is conditional and subject to Australian Competition and Consumer Commission (ACCC) and the New Zealand Commerce Commission (NZCC) regulatory processes.
Upon completion, Reckon stated that it intends to use the proceeds to pay off its debt. Following that, a special dividend will also be paid to shareholders.
Reckon Group chief executive Clive Rabie said the company was pleased to have signed a definitive agreement with MYOB to sell the division.
“The move marks a significant step forward for Reckon, as we look to narrow our focus on the small business accounting software market, further fuelling momentum in an area that’s rife with untapped opportunities, especially as more enterprises look to the cloud,” said Mr Rabie.