Australian accounting software vendor MYOB is to buy Kiwi concern NZA Gold but, on the basis of past international buy-outs of local products, accounting software consultant Rob Clarke wonders if the deal will ultimately founder.
Under the terms of the agreement, MYOB will pay $4.3 million for the New Zealand company, which started up in 1991 and has more then 10,000 small and medium business customers throughout the country.
MYOB general manager David Lowe says the strategic fit between the two companies is “excellent”.
NZA Gold founder Raymond Davey will continue to work for MYOB.
But Auckland-based Clarke points to similar acquisitions in the past which have resulted in the local company ultimately being bought back by its original owners because the international purchaser decides to jettison it.
In 1993 US company Platinum Software bought local accounting company CBA. CBA had thousands of local users for its DOS-based package and Platinum wanted a ready-made customer base for its Windows-based product. However, the customers didn’t migrate across as hoped and Platinum sold CBA back to original owner Don Bowman.
A similar example is the purchase by Australian company Solution 6 of Auckland-based exo-net for about $32 million from local developers Mark Loveys and Maurice Bryham in 2000.
Last month Solution 6 sold 70% of the company to a former management team.
However, Australian developer Attache Software, which bought local package Prophet Software in 1999, continues to sell the software.