MYOB has pulled out of its AU$180 million (US$136.2 million) deal to buy competitor Reckon’s accounting software products in favor of building up its own business, which will result in lower margins and higher spending on product development in the short-term.
The Australian Competition and Consumer Commission (ACCC) was due to make a decision on the deal by June 21, but it had issued a strong statement in March expressing concerns with the acquisition and its effect on competition in the space. MYOB chief executive Tim Reed said an update from last week indicated the competition watchdog was still inclined to block the transaction, forcing the AU$1.8 billion (US$1.4 billion) company’s hand.
The length of the regulatory process, combined with “competitors” revealing through the ACCC process that they could not provide a full suite of online practice management tools to clients, had motivated MYOB to abandon the acquisition in favour of an organic growth strategy.
Full Content: The Australian