ANZ confirms it’s talking to MYOB but the industry is dubious about financial merits of a buyout
One question being asked about ANZ’s potential move on MYOB is what will this mean for the existing relationship between the accounting software provider and Westpac?
As it stands, Westpac offers its business banking customers a deal where they receive a one-year subscription to MYOB for free if they sign up for a month.
It begs the question: why is ANZ buying the business – one with a reported asking price of more than $4bn – when it could buy just a stake in the company or embark on a strategic relationship and achieve the same result?
Owner Kohlberg Kravis Roberts purchased MYOB in 2019 for about $2bn, and some believe it has been outpaced on performance by rival Xero.
ANZ, advised by Macquarie Capital and Jarden, has confirmed it is in talks with MYOB, which is advised by Credit Suisse.
The logic is thought to centre on gaining customer data to sell business customers more banking products.
However, expectations are that this would be unlikely to happen without customer permission and incentives would need to be offered to pass the data on.
Sources say ANZ approached KKR about the transaction.
Although ANZ has confirmed it is in talks with KKR, it says there is no certainty that a transaction will take place.
ANZ is thought to be embarking on the acquisition partly to protect its market share at a time of compelling offers from lending rivals.
The question is also how much growth could MYOB achieve while it is owned by ANZ?
Customer growth is one of MYOB’s key areas of focus and it has a market share of about 20 per cent compared with Xero’s 60 per cent.
Some market experts have described the acquisition as a big bet on the accounting software market and a bold strategic move.
ANZ has looked at digital businesses in the past that would offer opportunities to gain additional customers, including the online real estate website Domain.
But should $4bn be what a deal is worth for MYOB, market observers say it feels like a big price to pay for the asset.
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