US private equity fund Bain Capital has bagged Australian software company MYOB for about A$1.3billion ($1.4 billion), outbidding British rival Sage Group Plc, the Financial Times yesterday reported, citing people familiar with the talks.
Bain and Kohlberg Kravis Roberts (KKR) had re-entered the race to bid for MYOB after the UK software group's stock fell on investors concern that the proposed acquisition could be worth more than 25 per cent of its own market value.
Victoria-based MYOB, whose name stands for 'Mind Your Own Business', provides accounting, payroll and retail software and web hosting to small and medium businesses in Australia and New Zealand.
Its products are used by over 1,000,000 businesses and over 10,000 accounting practices in both countries.
The software firm was acquired by a private equity consortium led by Archer Capital and HarbourVest Partners in 2008 for about A$450 million ($296 million).
In the first round of bidding, Bain and KKR's offerswere rejected and Sage emerged the preferred bidder. But both PE firms re-entered the race after a falls in Sage's share price and a weak pound mean its offer would now require shareholder approval, which created uncertainties for its offer.
Sage's share price has fallen by about 10 per cent since the beginning of this week and about 16 per cent since it entered the bidding process early this month, giving the Newcastle upon Tyne-based Sage a market capitalisation of around £3.2 billion ($ 5.2 billion).
At that level, the company would require shareholder nod for the deal, which it did not require when it first made the offer. But Sage, one of the UK's largest software firm made the mistake of not initially structuring the deal in such a way where it would not have required a vote, the paper said, citing a person close to the process.