MYOB and BankLink unite to define a new era in cloud accounting

MYOB and BankLink unite to define a new era in cloud accounting

MYOB Holdings Pty Limited (“MYOB”), today announced that one of its subsidiaries, MYOB Finance NZ Limited, has signed an agreement to purchase the unlisted business, BankLink, from Media Transfer Services Limited. The purchase was announced to the Australian Securities Exchange today.

MYOB and BankLink are market leaders in the provision of business management solutions to SMEs and accountants in New Zealand and Australia, and offer highly complementary solutions. This acquisition is a key strategic move that will leverage the strengths of both organisations, and position the new entity to lead the next wave of industry growth – cloud accounting. MYOB’s SME solutions empower businesses to run their own accounting system, and BankLink enables accountants to do the accounting on behalf of the business.

The combined entity will have the most comprehensive set of accounting solutions in the market today. This includes MYOB’s flagship cloud accounting solution AccountRight Live, its entry level online accounting solution LiveAccounts and BankLink’s market leading accountants’ solution BankLink Practice. All solutions will be powered by BankLink bank feeds, known for being secure, reliable and accurate; essential requirements for successful cloud accounting solutions. Having the most secure and accurate bank feeds available is a distinct competitive advantage in delivering MYOB’s cloud strategy. Sales of MYOB’s cloud accounting solutions now make up one-third of all new product registrations, almost three times higher than last year.

BankLink is a highly successful organisation. The BankLink Service is used by nearly 5,000 accounting practices, and more than 320,000 small businesses throughout New Zealand and Australia. Each month, it securely delivers in excess of 13 million customer transactions from more than 100 banks, credit unions, brokers and fund managers. BankLink’s commitment to innovation and product development has been recognised with numerous awards.

MYOB Chief Executive Officer, Tim Reed says, “Key to the success of MYOB’s online strategy is its partnership with accountants in practice. The coming together of MYOB and BankLink allows accountants to recommend the most appropriate accounting solution for each and every unique client. In addition, we can now further enhance this partnership by having more team members on the ground focused on accountants in practice and supporting their success.”

Mr Reed says “Accounting is going through a period of rapid innovation. Cloud solutions are replacing desktop applications; bank feeds are a key component of a cloud solution, as they are used as source data for the accounts. The benefits of automatic bank feeds are huge; they significantly reduce the time it takes to do the books. If you are running a small business, it is essential to have accurate financials. BankLink has proprietary methods of supplying accurate, reliable and secure bank feeds that are more accurate and secure than others.”

BankLink‘s General Manager Operations, Richard Reese, says “We are delighted that BankLink will become part of an iconic and reputable business that has a strongly aligned and clear vision for the future. We look forward to future success as part of MYOB.”

MYOB will acquire the BankLink business for NZ$136m to be funded by NZ$75m senior bank debt, with the balance funded by an equity funding from MYOB’s shareholder. Performance against senior bank debt and MYOB Notes covenants improves as a result of the acquisition due to the reinvestment of NZ$61m of equity funding by MYOB’s shareholder and the contribution of the earnings of the BankLink business to MYOB’s earnings.

Craig Boyce, Bain Capital Managing Director, says “The acquisition of BankLink is highly strategic; the competitive advantage provided by their integrated bank feeds is key to MYOB’s cloud offerings. We look forward to further supporting and investing in MYOB’s growth and product development in the coming years.”

BankLink’s European business does not form part of the acquisition. The growing United Kingdom based operation, soon to be renamed “Bankstream”, will be retained by BankLink director Derek Jones. It will be supported by a dedicated development and operational team based in Auckland. The sale and purchase agreement is subject to a number of conditions including regulatory and third party consents. The acquisition is expected to be completed in June 2013.


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About BankLink

BankLink, as part of the Media Transfer Services (MTS) company, was founded in 1986 in New Zealand by Malcolm MacDonald, Derek Jones and Steve Agnew. The original aim was to provide a time-saving service to accountants and their small business clients. For 25 years BankLink has been providing easy to use accounting solutions that deliver better efficiencies, improved communication, and increased profits for accounting practices and their clients. BankLink is an innovative service that automates and streamlines the accounting process. As a recognised market leader, BankLink is used by nearly 5,000 accounting practices, and more than 320,000 small businesses throughout New Zealand and Australia. BankLink securely delivers over 13 million customer transactions from over 100 banks, credit unions, brokers and fund managers. BankLink won the 2012 AUT excellence in Business Support Award, in the WHK Large Business $10 million to $50 million turnover category; the ‘Most Innovative Approach to International Business’ award by New Zealand Trade and Enterprise; and were a finalist in the PricewaterhouseCoopers ‘Hi-Tech Company of the Year,’ the ‘International Business Wales Hi-Tech Exporter of the Year’ awards, and the 2011 ‘NZ Hi-Tech Awards.’

About MYOB Group

MYOB is a leading provider of business management, accounting, payroll and tax software in Australia and New Zealand, supplying its software, services and support to small and medium sized enterprises (“SMEs”) and public accountants. MYOB’s solutions extend online, delivering innovation through cloud accounting solutions such as LiveAccounts and the recently launched AccountRight Live. This enables its clients to be more productive, supporting more streamlined connections with their staff, business partners, business advisors and customers. MYOB estimates it currently holds a market share of approximately 60–70% for SMEs and approximately 60–70% for public accountants, by revenue from sales of these products and services in Australia and New Zealand. MYOB believes clients value the ease of use, reliability, integrated nature, ongoing regulatory compliance updates and client support services that it provides. MYOB commenced operations over 20 years ago and now supports nearly 1 million businesses, predominantly SMEs, and more than 40,000 accountants across Australia and New Zealand. MYOB employs more than 900 staff and is headquartered in Melbourne, Australia. It has four key business divisions, which are supported by group functions including finance, strategy, marketing, IT, legal and human resources. For the 12 months ending 31 December 2012, the MYOB Group generated $218.1 million in revenue, $107.5 million in covenant EBITDA ($27.3 million NPATA and a NPAT loss of $14.8 million) and a covenant EBITDA margin of 49.3%. Funds advised by Bain Capital became the majority owner of the MYOB Group in September 2011. Bain Capital has a significant history of advising on investments in software and business services companies globally.