MYOB Strengthens NZ Payroll Solutions with Latest Acquisition
Melbourne-based business management solutions provider MYOB has acquired New Zealand-based payroll solutions provider Information Management Services (IMS) for NZ $ 9.7 million as part of its growth strategy to strengthen its online payroll solutions and target value-add acquisitions to enhance its core business.
According to MYOB SME Solutions General Manager James Scollay, this is company’s third NZ payroll solutions acquisition and fourth NZ acquisition in the recent years. Last August, the company acquired payroll and HR management software firm PayGlobal for NZ$13.7 million, and in May the company announced it had bought Lower Hutt-based Ace Payroll as part of a NZ$14 million deal. Meanwhile, NZ$8.1 million has been paid on completion for IMS with the remainder due in 2016 and 2017 based on satisfying certain conditions. In 2012, it acquired BankLink for NZ$136 million.
Scollay said, “MYOB’s goal is to re-imagine what payroll solutions can deliver for SME operators in terms of productivity, compliance and helping to strengthen their trusted relationship with employees.”
Commitment to NZ Payroll
IMS has been developing and supporting payroll solutions for NZ businesses for over 30 years. It supplies payroll software to over 10,000 businesses who have between 1 to 5000+ employees in NZ and the Pacific Islands. Many of the IMS payroll clients currently use MYOB accounting solutions leading to an increase in average revenue per client rather than an increase in paying users. IMS is a profitable business that will be immediately accretive to MYOB’s earnings.
“We estimate over 30 percent of the New Zealand workforce is paid using MYOB software and we’re committed to providing easy online payroll solutions for all employers – whether they have just one employee or employ over 500 staff,” said Scollay.
He added, “Payroll is an attractive market segment in NZ with significant online growth potential. This acquisition will help deepen our relationship with NZ clients as we continue to roll out MYOB’s next generation of cloud accounting and payroll solutions.”
“IMS has provided a market leading range of payroll solutions for NZ businesses over the last three decades. Uniting with leading cloud accounting provider MYOB is the natural next step for our business and an exciting outcome for our clients,” said IMS Director Kevin Atkinson.
Atkinson founded IMS in 1983. He is a prominent Hawkes Bay community leader who is currently Chair of Hawkes Bay District Health Board, Chair of Unison Networks and a Director of Hawkes Bay Rugby.
Return to ASX
In addition, during its first set of half-year results since returning to the Australian Securities Exchange (ASX) in May, MYOB posted pro forma earnings before interest, taxes, depreciation, and amortisation (EBITDA) of AU$72 million, an increase of 14 percent from the first half of last year, while statutory EBITDA fell from AU$55 million last year to AU$47 million.
In August, the cloud accounting software reported that over one-quarter of its 528,000 paying customers were now cloud users. As of the end of June 2015, cloud subscriptions totalled 142,000, an increase of 65 percent from the same time last year.
As payroll has contributed to MYOB’s success in New Zealand over the past 15 years, this acquisition makes payroll easy for NZ small businesses – a win-win.
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