MYOB agrees to acquire Ace Payroll - Strengthens position in New Zealand payroll solutions market

28 May 2015

Within a month of listing on the ASX, the market-leading provider of business management software solutions in Australia and New Zealand, MYOB, has made a strategic move in the New Zealand payroll solutions market, announcing today that it has signed an agreement to acquire New Zealand-based Ace Payroll Plus Limited, for a purchase price of NZ$14 million.

“I am delighted to announce today that MYOB is uniting with Ace Payroll.  Both companies bring a significant amount of experience to the table – providing very popular payroll solutions in New Zealand,” says MYOB CEO, Tim Reed.

“Ace Payroll provides payroll solutions for thousands of New Zealand SMEs. Both Ace and MYOB have been in the New Zealand market for over 20 years, and have established track records of making it easy for employers to pay their staff.”

“MYOB has extensive experience in supporting customers in running their payroll. When business owners need advice about payroll, they need it straight away. Both MYOB and Ace Payroll have the same approach to making business life easier for our clients by providing phone support.  This is yet another reason why uniting our companies makes sense,” Mr Reed says.

“This is a really exciting acquisition for MYOB. It will help drive our growth strategies, as outlined in our recent prospectus, and solidify our leadership position in New Zealand payroll,” says MYOB Group CFO Richard Moore.

“It is a profitable business that will be immediately accretive to both our earnings and EPS, although the timing of the deal will mean the 1H earnings impact will not be material.  Due to the sizeable overlap with our existing MYOB client base, the increase in our number of paying users will also be small, but it will help bolster our ARPU (Average Revenue per Paying User) in New Zealand and will deepen our relationship with many New Zealand clients, as we will now provide them with both accounting and payroll software.”

Ace Payroll founder Phil Eriksen says, “We’re very proud of the business we have built over the past 20 years and we believe that uniting with MYOB is the best possible outcome for our customers.”

Investment in innovative cloud payroll platform

MYOB also announced today that it is embarking on the development of the next generation of online payroll solutions for New Zealand businesses. MYOB is experiencing strong uptake of its online solutions, with 67% of new customers choosing a cloud accounting solution in Q4 2014.

“With our new online payroll solutions, our goal is to remove complexity and create even simpler solutions to help business owners build better relationships with their staff,” says Mr Reed.

“Our research and development spend – over $100 million in the past three years – is entirely focused on the Australian and New Zealand markets. Not having to split our resources across multiple regions means that MYOB can provide world-leading SME payroll and accounting solutions specifically for small businesses in Australia and New Zealand.”

“Our solutions suite the needs of businesses both small and larger, from start-ups through to mid-tier companies employing up to 1,000 people” Mr Reed says.

MYOB Group Limited is the parent company of the purchasing MYOB entity, MYOB Finance NZ Limited. The transaction is scheduled to be completed around 31 May 2015.

For MYOB product information, research results, business tips, discussions, client service and more visit the MYOB website, or its blog, LinkedIn, Twitter, Facebook, Instagram and YouTube sites.

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For further comment or other information please contact:

Sarah Beyrath, MYOB PR and Corporate Affairs Manager

P: 02 9089 9043 / M: +61 427 223 841 / E: Sarah.Beyrath@myob.com

Louise Halloran, Ogilvy PR

P: 02 8437 5397 / M: +61 407 044 727 / E: louise.halloran@ogilvy.com.au

About MYOB

Established in 1991, MYOB is Australia’s leading accounting software provider. It makes life easier for approx. 1.2 million businesses across Australia and New Zealand by simplifying accounting, payroll, tax, CRM, websites, job costing, practice management, inventory, mobile payments and more. MYOB also provides ongoing client support via many channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly in cloud computing solutions, and spends more than AU$35 million annually on research and development. For more information, visit myob.com.au.