MYOB seeks $833m with public float

MYOB is seeking to raise up to $833.3 million with an initial public offer.

The listing, which could easily become the biggest ASX technology float of 2015, may see the Melbourne-headquartered company valued at up to $2.69 billion. The retail offer is scheduled to open on 13 April and the company is expected to commence trading on the stock market 4 May.

There has been plenty of speculation MYOB would go public, but it was not until this week that the company lodged a prospectus. Bain Capital, which acquired MYOB in 2011, could retain 57 percent ownership under certain conditions.

MYOB chief executive Tim Reed said: "The company has taken enormous strides in recent years under the ownership of Bain Capital. We have made significant investment into R&D in the business to innovate and further drive our leadership through our range of cloud accounting solutions."

The software company has also added considerable firepower at board level with several new appointments, notably appointing former senior Telstra executive Justin Milne as non-executive chairman.

Milne is a well-known figure in both the telco and IT sectors, having led Telstra’s broadband business as well as being chief executive of OzEmail and the Microsoft Network, and is also the current NBN Co non-executive director.

He is also as chairman of Netcomm Wireless and non-executive director of integrator SMS Management & Technology.

Battle with Xero

The float comes at a crucial time for MYOB, which dominates market share in Australia for accounting software, but is seeing continued growth from rival Xero. Today Xero announced it had reached 200,000 Australian business customers, while MYOB claimed it had more than 116,000 paying subscribers using its cloud products at 31 December 2014.

Growth in MYOB's user base helped drive the company to a 16 percent increase in revenue to $287 million in the year to December.

MYOB has been pushing into larger business territory, announcing its first cloud ERP product aimed at the mid-market in January – which it is hoping will be attractive to integrators. The company also has a new payroll solution planned.

Meanwhile, Xero announced a major feature update last week, including the addition of more advanced inventory management built into the core Xero platform. The vendor claimed the update brings Xero “beyond the realm of traditional accounting software”.

Public money

The MYOB float follows a big year in 2014 for technology listings in Australia, with a reported record year in the value of IPOs on the ASX.

This included Cirrus Networks, whose reverse listing with Liberty Resources is still on the cards, and Cloud Central, whose reverse takeover with Dromana Estate Limited didn’t eventuate. Security company Covata also listed on the ASX in 2014.

MYOB’s history goes back to 1991, with the company eventually listing on the ASX in 1999, before delisting in 2008. MYOB was then bought by Bain Capital in 2011, and has since made a string of acquisitions including BankLink in 2013 and an investment in software company Acumatica in 2014.