Home Industry Development MYOB sells US business, leaves China

MYOB sells US business, leaves China

In a move that signals a return of MYOB to its core operations, the accounting software company has divested itself of its US business and pulled out of China after a fruitless three years. MYOB has sold its US operations including the development of its Mac accounting software to its local distributor, Acclivity.

Under the terms of the agreement, Acclivity has acquired MYOB US and its Mac and PC development team.

MYOB also announced that it would completely withdraw from mainland China "in the light of [presumably poor] progress to date", three years after opening its operations there.

The company will largely focus its Asian efforts on Hong Kong, Singapore, Malaysia and other parts of Asia, "with a specific drive to profitably across the region."

MYOB officials said the overall effect of divesting its US interests would "align the predominantly US based Mac sales with a US based development team and move MYOB's financial commitment to this platform from a fixed annual development cost denominated in USD to a local currency, royalty stream paid on sales revenue from the regions."

CEO Tim Read said "In challenging economic circumstances, we believe it is prudent to place more effort and attention on markets where the company’s position is established and where it can generate a profit."

Acclivity will continue to develop FirstEdge, AccountEdge and AccountEdge Network Edition for the global market, and the MYOB family of Windows products for the US market.

MYOB will continue to republish the Mac products in Australia, New Zealand and Asia. "There will be no customer disruption," said Tom Nash, managing partner at Acclivity.

"This deal also allows us the flexibility to enter markets outside of the US," he added. "We're now free to explore how we will bring AccountEdge back to Canada. By popular demand, I might add." (Nash previously served as the original general manager of MYOB's Canadian operation.)

What's the likely effect on MYOB's financials? Please read on.

Acclivity's other interests include Werck (a joint venture that develops point of sale software for the Mac) and acting as an authorised solution provider for CRM/ERP SaaS product NetSuite.

The combined changes are expected to increase MYOB's 2008 earnings before interest, taxation, depreciation and amortisation (EBITDA) by $6.2 million, largely due to a reduction in operational expenses and product development costs.

However, the changes will also involve cash costs of $4 million and a $7.3 million writedown of intangible assets.

The exact terms of the Acclivity transaction have not been disclosed.

The company is also predicting reduced sales of new licences, but says maintenance charges and other revenues are running ahead of plan and that EBITDA for 2008 should be 6 percent higher than in 2007 on a like-for-like basis.

The Acclivity deal brings the company we know as MYOB full circle. It started as a regional republisher of the MYOB software, and subsequently acquired the intellectual property relating to the product, expanding into North America and Europe.

Earlier in 2008, MYOB sold its UK division to Mamut, a provider of software and Internet services for SMEs. Selling its US operation returns the company to its original Asia-Pacific footprint, although its product portfolio has changed significantly since the early 1990s.


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Stephen Withers

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Stephen Withers is one of Australia¹s most experienced IT journalists, having begun his career in the days of 8-bit 'microcomputers'. He covers the gamut from gadgets to enterprise systems. In previous lives he has been an academic, a systems programmer, an IT support manager, and an online services manager. Stephen holds an honours degree in Management Sciences and a PhD in Industrial and Business Studies.