MYOB Group to be replaced by Nearmap as part of S&P/ASX 200 Index

MYO

MYOB Group Limited (ASX: MYO), headquartered in Glen Waverley, Australia is a leading provider of online business management solutions that enable simplified operations, including accounting, payroll, tax, practice management, CRM, job costing, inventory and more for businesses and accountants across Australia and New Zealand. MYOB operates via three key business divisions comprising: Clients and Partners that offers business solutions to SMEs and Advisers; Enterprise Solutions cater to larger businesses; and Payment Solutions.

Recently, on 15th April 2019, the S&P Dow Jones Indices announced that it would remove MYOB Group Limited from the S&P/ASX 200, subject to shareholder and final Court approval of the scheme of arrangement, whereby the company will be acquired by KKR & Co Inc. As the trading closes on 24th April 2019, S&P Dow Jones would replace MYOB Group with Nearmap Ltd (ASX: NEA) in the S&P/ASX 200.

MYOB Group’s current market valuation stands at AUD 2 billion with ~ 590.8 million outstanding shares. On 16th April 2019, the MYO stock is trading at AUD 3.395, up 0.15% (as at 12:20 PM AEST). Its YTD return stands positive at 1.80%.

Recently, the National Australia Bank Limited and its associated entities purchased around 30,060,317 fully paid ordinary shares of MYOB, thereby earning 5.088% interest in the company.

On 1st April 2019, MYOB Group released a Supplementary Disclosure in reference to the proposed scheme of arrangement, whereby Kohlberg Kravis Roberts & Co. L.P., together with its affiliates, would be acquiring, for $3.40 per share all cash consideration, all of the shares in MYOB that it does not already own. Accordingly, the Federal Court of Australia has approved the despatch of the attached letter to MYOB shareholders regarding KKR’s letter to MYOB as disclosed to the market on 20th March 2019.

The letter laid out all the details of the proposed acquisition and advised the shareholders to review the Scheme Booklet containing information that would help them make an informed decision about whether or not to vote in favour of the scheme at the Scheme Meeting to be held at 3:00 pm (Sydney time) on Wednesday, 17th April 2019 at MYOB Office, Level 8, 45 Clarence Street, Sydney NSW 2000.

According to MYOB’s Annual Report for 2018, the company invested heavily, around $50 million, into research and development to accelerate the development of the MYOB Platform, to win new accounting practices and to increase the referrals received from SMEs. Besides, it also increased investments to around $30 million into sales and marketing to strengthen MYOB’s brand value in the market.

The revenue for the period increased by 7% year-on-year to $445 million, while the underlying EBITDA stood at $190 million with an EBITDA margin of 42.6%. There was a registered year-on-year increase of 57% in the number of online subscribers to 628k.

Segment wise, Clients & Partners generated $364.3 million revenue, while the Payment Solutions and the Enterprise Solutions divisions generated $10.7 million and $ 67.8 million, respectively.


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