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MYOB to list on the ASX: Here’s what you need to know

With the Medibank Private (ASX: MPL) initial public offer (IPO) near completion, the market’s attention could soon turn toward the IPO of the $3 billion accounting software giant MYOB in what could prove to be the biggest float in 2015. As reported by The Australian Financial Review, Bank of America Merrill Lynch, Goldman Sachs and UBS have all been appointed as joint lead managers on the float.

MYOB is Australia’s leading provider of accounting software to small and medium businesses. Its recently released half-yearly numbers showed that it had increased revenue to $140 million – a 21% improvement on the previous corresponding period – while earnings before interest, tax, depreciation and amortisation (EBITDA) had grown by an even greater 29% to $70 million.

The company also revealed that it had in excess of 75% of the local market for small and medium businesses, ahead of other companies including Intuit, Reckon Limited (ASX: RKN) and XERO FPO NZ (ASX: XRO).

Indeed, MYOB’s increased focus on cloud-hosted products could pose as an enormous threat to XERO, which has already seen its shares decline 64% since March this year. While XERO has set its sights on growth in Europe and America, MYOB is striving for a greater share in the Australian and New Zealand markets – markets which XERO has been recognising strong growth in to date.

In August, The Australian Financial Review quoted MYOB’s CEO Tim Reed as saying: “We think that is a real strength because it enables us to focus our entire R&D on the needs of Australian and New Zealand businesses.”

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Motley Fool contributor Ryan Newman owns shares of XERO FPO NZ. The Motley Fool owns shares of XERO FPO NZ.

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