MYOB Group off the ASX Official List upon execution of the scheme of arrangement with KKR

  • May 08, 2019 AEST
  • Team Kalkine
MYOB Group off the ASX Official List upon execution of the scheme of arrangement with KKR

MYOB Group Limited (ASX: MYO), headquartered in Glen Waverley, Australia, offers ~1.2 million businesses with a suite of intelligent and intuitive business management solutions to simplify operations like payroll, tax, job costing, practice management, CRM, accounting, inventory and more for clients based in Australia and New Zealand.

MYOB’s three business segments comprise of - Enterprise Solutions for larger businesses; Clients and Partners attending to SMEs and Advisers; and the last one is Payment Solutions.

On Wednesday, May 8th, 2019, the company informed the stakeholders that it would be removed from the Official List of ASX Limited with effect from the close of trading on Thursday, May 9th, 2019 in accordance with Listing Rule 17.11. This follows MYOB Group’s announcement on 20 March 2019, about the scheme of arrangement between MYOB and its shareholders, according to which an affiliate of Kohlberg Kravis Roberts & Co L.P., ETA Australia Holdings III Pty Ltd (KKR), would acquire all of the issued capital in MYOB that it does not already own, has today been implemented.

The Scheme Consideration, which is around $3.40 cash per share, for each MYOB share held at the Scheme Record Date (7.00pm on May 2nd, 2019), has been paid to holders of Scheme Shares for the transfer of their Scheme Shares to KKR under the Scheme. Scheme Shareholders will shortly receive their Scheme Consideration and holding statements evidencing their entitlement under the Scheme.

MYOB signed the Scheme Implementation Agreement with ETA Australia Holdings III Pty Ltd, as announced on December 24th, 2018 after the US-based Private equity giant KKR presented the offer in October 2018. Thereafter, on April 17th, 2019, it was disclosed that the scheme was approved by the requisite majorities of MYOB shareholders, whereby around 367,976,439 of them voted in favour of the same.

As per the company’s Annual Report for 2018, the company has brought forward the research & development investment to around $50 million to expedite the advancement of the MYOB Platform, to gain more referrals from SMEs and win new accounting practices. Besides, to strengthen brand awareness and value in the market, MYOB has also injected around $ 30 million into sales & marketing investments. The Advisor sales team is being expanded while Marketing spend is also increasing to ensure that the direct SME sales remain robust and customer acquisition costs are maintained within 12 months.

For the full year, the revenue increased to $445 million, up 7% year-on-year and the recurring revenue represents 97% of the total revenue, of which 82% was contributed by Clients & Partners segment ($ 364.3 million), 15% by the Enterprise solutions segment ($67.8 million) and lastly 2% by the Payment Solutions ($ 10.7 million).

The underlying EBITDA amounted to $190 million (statutory EBITDA of $ 181 million) with an underlying EBITDA margin of 42.6%. The statutory NPAT stood at $64 million while the NPATA increased 25 year-on-year to $104 million. The online subscribers also rose to 628k, which is 57% higher than the prior year figure.

The stock of the company last traded at a price of A$3.4 on 24 April 2019.


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