MYOB raising to cut $155m from its debts
ACCOUNTING software company MYOB has raised $155 million through a subordinated notes issue, at the upper range of expectations.
ACCOUNTING software company MYOB has raised $155 million through a subordinated notes issue, at the upper range of expectations.The money will be used to reduce debt and make a return to MYOB's private equity owner.The notes - with a maturity of five years and a margin of 6.7 per cent - will trade on the ASX as MYOB Finance Australia.MYOB had originally sought $125 million from Australian and New Zealand investors, but increased the offer after strong support during the bookbuild.Note holders will also have the right to a 2.5 per cent discount in an initial public offering - although chief executive Tim Reed plays down the prospect of a sharemarket float in the near future given Bain Capital has owned the business for only a year, after paying a bumper $1.2 billion.Mr Reed said MYOB was "looking forward to having an element of our business exposed to the public because it just gives an opportunity to regularly get out there and involve all stakeholders in how the business is performing".According to its prospectus, MYOB holds between 60 and 70 per cent market share in the accounting software market for small and medium businesses, and a similar percentage for accountants.Its main rivals are the ASX-listed Reckon and Xero. MYOB co-founder Craig Winkler is a director of Xero.Aaron Wallace, co-founder and online operations director at Nudge Accounting, said the notes' timing was interesting."MYOB is still the market leader but people say Xero is sexy and that they can use Xero, which is unusual for an accounting product," Mr Wallace said.For the year to September 30, MYOB reported $212.7 million in revenue, up 4 per cent, and a pro forma loss of $19.2 million.
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