AVCJ

Bain emerges as winner in MYOB auction

  • Anita Davis
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Bain Capital is to acquire Australian business software maker MYOB from Archer Capital and HarbourVest Partners for approximately A$1.2 billion ($1.3 billion). It outbid private equity rival KKR and UK software maker Sage, which was earlier said to be the preferred buyer.

Sources told AVCJ last week that Sage was the frontrunner for the purchase and was believed to have bid A$1.4 billion - more than Bain and KKR, and well above Archer and HabourVest's A$1 billion target. But volatile market conditions that have resulted in a weaker pound - combined with Sage's own falling shares - reportedly led the company to withdraw from the purchase process as it would have needed additional shareholder approval to complete the acquisition.

The deal marks Bain's largest transaction in Australia to date, and is also the third-highest private equity exit in the market, The Australian adds. The top two exits remain TPG's A$2.3 billion listing of Myer in 2009 and the A$1.4 billion sale of Affinity Health by CVC Asia Pacific and Ironbridge Capital in 2005.

Bain's A$1.2 billion valuation is approximately 11.3x MYOB's reported EBITDA in 2010. The sale also provides a hefty windfall for the company's PE owners, as Archer and HarbourVest purchased MYOB for approximately A$450 million (then $296 million) in January 2009.

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