Accounting software maker MYOB has finally announced its run to list on the Australian stockmarket in one of the most highly anticipated IPOs this year. The veteran hopes to cash in on the migration to cloud software and raise A$833.8 million to pay off its large debt and give its investors – led by private equity owner Bain – a return on its performance.
Bain had considered a trade sale until recently but had decided to list after A$15 billion was raised in 2014, Reuters reported. MYOB said Bain was keeping its 57 percent stake under escrow, without giving further details.
MYOB is hoping to achieve a market capitalisation of up to A$2.8 billion. This is more than double the A$1.2 billion price Bain paid Archer, another private equity firm, just four years ago. (Archer had paid A$558 million four years before that.)
However, it will be significantly less than Xero’s A$3.3 billion valuation – despite the fact that MYOB will earn nearly triple the revenue (A$126.6 million vs A$323 million).
Another interesting comparison is the US giant Intuit. It has a much larger share (85 percent vs 60 percent) of the US market. The US population is 10 times the size of Australia, and Intuit’s valuation of US$27 billion is nearly exactly 10 times the value MYOB is hoping for.
One key difference between Intuit and MYOB is the size of its ambitions. Intuit has started expanding aggressively into India, Canada, Australia and Singapore as part of a campaign to expand its global market share.
MYOB has said that it only wants to compete within Australia and New Zealand. A copy of its 220-page prospectus is available at myobshareoffer.com.au.