Shares in accounting software provider Reckon Limited (ASX: RKN) soared 33 per cent to $1.61 this morning after it revealed local rival Myob Group Ltd (ASX: MYO) has offered $180 million to acquire "the assets of the Accountant Group".
According to Myob the group it is purchasing provides software solutions to more than 3,000 accounting practices in Australia and New Zealand and the acquisition will help promote the development of its online practice suite.
It also believes Reckon's Accountant Group will bring increased referrals and "development synergies" as clients could be migrated to Myob's online platform.
The $180 million price tag is to be funded by cash and a new debt facility with the deal expected to be immediately earnings per share accretive on an adjusted basis or "on a statutory basis once the integration funding is fully deployed".
Reckon will retain its business and legal transaction management operations and it's no surprise the Reckon share price has rocketed given the market only valued the entire business at around $150 million prior to the deal's announcement.
Moreover, the retained businesses represented around half of group revenue and EBITDA prior to the deal and thanks to Myob's offer Reckon investors may receive a substantial special dividend given the slimmed down group will have a large pile of cash on its balance sheet.
North American private equity operator Bain Capital (not know for its largesse in business) still owns a significant stake in Myob and is potentially looking to sell more of its stake.
In lunchtime trade Myob shares are up 1% to $3.67.
