MYOB agrees to reduced KKR offer

Accounting software firm has until Febraury 2019 to seek out a superior offer.

MYOB scraps Reckon Accountants Group acquisition

On Christmas Eve, MYOB recommended its shareholders accept the reduced offer from KKR of AU$3.40 a share.

Private equity firm KKR & Co in October made the Australian accounting software firm an offer take control of the rest of the company at AU$3.70 per share, which would see the equity firm part with AU$1.75 billion, before upping its bid to AU$3.77 in November.

When announcing its intention to acquire MYOB, KKR upped its stake to 19.9 percent, after purchasing just under 104 million shares from Bain Capital for AU$3.15 per share -- approximately AU$327 million. Bain Capital now has a 6.1 percent interest stake in MYOB.

By December, KKR had reduced its bid to AU$3.40 with MYOB saying at the time it was not in a position to recommend the revised offer. Come Christmas Eve, MYOB had agreed to the offer.

MYOB said one of the arrangements agreed to was a "go shop" clause that allowed it seek superior offers until Febraury 22, and should it receive one, KKR agreed to sell its holding or vote in favour of the new offer. According to the terms of the scheme, superior was defined as being 5 percent higher than KKR's cash bid and had to be an offer for the entirety of the accounting software firm.

"We believe it is in the best interests of shareholders to put and recommend this transaction to shareholders having regard to market uncertainty and the longer-term nature of the strategic growth plan the company has embarked upon," MYOB chairman Justin Milne said.

"The unique provisions of the agreement with KKR provide a level of certainty for our shareholders and gives us the opportunity to ensure a full and fair market testing of the revised proposal over the implementation period."

Shareholders will be able to vote on the transaction at an April 16 meeting. MYOB said the offer represented a 17 times EBITDA multiple, and a 22 times free cash flow multiple.

At the same time, MYOB said it expects to report 7 percent organic revenue growth for its 2018 financial year, as well as an earnings before interest, tax, depreciation, and amortisation (EBITDA) margin around 42 percent, and over AU$100 million in free cash flow.

For the 2017 fiscal year, MYOB reported AU$60.7 million in after-tax profit, a 16.3 percent increase over its 2016 figure.

Revenue for the 12 months to December 31, 2017 was AU$416.5 million, while underlying EBITDA totalled AU$190 million.

MYOB returned to public trading in 2015, after raising AU$833 million for its IPO.

Bain Capital bought MYOB for $1.3 billion in 2011 from Australia's Archer Capital and other shareholders. After returning the accounting firm to the ASX, Bain Capital retained a controlling 57 percent stake.

KKR and Macquarie Group looking at Cellebrite

Japan's Sun Corp is looking to sell up to 50 per cent of Israeli digital intelligence provider Cellebrite, which values the fully-owned affiliate at $400 million, The Calcalist newspaper said on Wednesday.

Sun Corp was in talks with a number of potential buyers, including Australia's Macquarie Group and KKR, it said.

Officials at Cellebrite, Sun Corp, and Macquarie were not immediately available for comment. KKR declined to comment.

With AAP

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