We thought that Sage chief executive Guy Berruyer was preparing for a new round of acquisitions when the company released a trading update last month (see Status quo maintained at Sage). Now we know that it is. The UK business management software company has confirmed it is in talks with Australian accountancy software player, MYOB (Mind Your Own Business).
MYOB would be a major meal for Sage, which has made just two purchases since 2008 (Aytos and Netcash) – neither major. Word has it that a deal with MYOB could be worth around the $1bn mark. MYOB is owned by private equity firms Archer Capital and HarbourVest Partners LLC, who acquired it for around A$450 million in 2008. According to Reuters reports, MYOB generates a core profit of about A$100 million.
Although MYOB used to be available in the UK - and there is still a loyal user base here that has been warned that its applications will be deactivated at the end of this year - it is very unlikely that Sage will reintroduce it here. However, MYOB will further improve Sage’s AAMEA (Africa, Australia, Middle East and Asia) business, which is growing well and was up 10% year on year for the first half of the year (see Sage US healthcare business still a concern).
MYOB would further Sage's international reach in a product area it understands - in contrast to Sage’s ill-conceived and poorly performing US healthcare acquisition. MYOB invested in Australian web hosting business SmartyHost back in 2008 and has a smattering of off-premise applications itself, so it has a foothold in the cloud space, something Sage is only recently coming around to.
Sage has dropped a few catches over the past couple of years (e.g. see Visma slips from Sage’s grasp – again). Let's see if they can grab MYOB with both hands.