Scratch that: PE firm Bain outbids Sage for MYOB

Well, I take back everything nice I said about the deal :)

Looks like Bain Capital, former home of US presidential candidate Mitt Romney, made a more compelling offer to Australia-based MYOB than their British colleagues at Sage.

Somewhere in here there is a perfect joke about Mormons, Brits, and their former penal colonies - but your humble blogger will have to get back to you later on that.  For now, let's content ourselves with chewing over yet another collection of banker's notes on the deal:

Archer Capital was advised by UBS and Bain Capital by Morgan Stanley.

Isn't that grand?  Archer, of course, is the PE firm that previously took over MYOB, and is now cashing out.

The Australian has the real scoop, pegging the deal at $1.2 billion:

The deal is a coup for majority MYOB owner Archer Capital, the local private equity firm that led a consortium buyout of the then-listed MYOB (an acronym for Mind Your Own Business) for $450 million in January 2009.  Sage, a British software supplier, had been in exclusive negotiations with the vendor and was offering about $1.3bn.  It is believed Sage's sharp share price drop last week prompted soul-searching on both sides of the deal.

A coup indeed.  Tripling your money in 2.5 years in the middle of a global economic death spiral.  Attention any UBS bankers involved in this deal:  Please contact me immediately if you would like your car washed, lawn mowed, or babies sat.  Zounds.

What will they call it? Sage Zero?

So Reuters is reporting that Sage Group is looking to buy MYOB.  This on the heels of some grumbling in the Sage partner community about the company's move to give all its already-acquired products a number-name.  Stephen Blythe wrote earlier:

I see no value to a Sage brand by dropping already heavily co-branded names like MAS, Accpac, ACT! or Peachtree and replacing them with numbers (50, 100, 200, 300 etc). This will only add significant confusion to existing clients and prospects and add client expectations that Sage has never been able to deliver.

I'm only half-kidding about calling it Sage Zero.  That's working for Coke, right?

According to the Reuters piece, they're valuing MYOB at $1 billion.  With a "b."  Now, if you're reading this from anywhere besides Australia or New Zealand, you might not be thinking about the same MYOB.  Check out the History section of the Wikipedia listing for all the confusing details.

This is kind of a return to form for Sage, which, as the Reuters article notes, has chosen to pay down its debt over the past three years rather than go out and make new deals.  Hear that, Infor?

Because this is such a market-specific buy, it's hard to work up too much snark on this deal, despite the surprising size.  I would imagine Sage is just buying share in AU/NZ, and probably won't try and make all our friends down there buy MAS 500 or whatever.  And despite the involvement of more private-equity goons before, during, and after this transaction, it's still reasonable to think of Sage as primarily a business software company rather than a debt-oozing money-laundering scheme.

But boy, they do have a lot of scraps on their table.