Big news in the accounting space with the announcement that CCH, a division of the international group Wolters Kluwer is acquiring software vendor Acclipse. Acclipse sells practice management software under the iFirm brand, and announced a few months ago the intention to roll out a client side accounting solution. Acclipse has around 55 employees and services 1000 or so accounting practices across Australia and New Zealand.
CCH is part of Wolters Kluwer, a global information services company focused on professionals. Wolters Kluwer is a large player with annual revenues of (2011) €3.4 billion ($4.7 billion) and approximately 19,000 employees worldwide. Wolters Kluwer Tax & Accounting is a provider of tax, accounting and audit information, software and services.
Terms of the acquisition have not been released but in discussions with Acclipse CEO Mike Chisholm, it would appear that this deal is one that has been negotiated from the upper echelons of Wolters Kluwer hierarchy and his hence more than simply a deal based on Australasian synergies. The indication I got is that Wolters Kluwer will use Acclipse as it’s practice and client-side software solutions internationally, and that these solutions will be integrated deeply into the tax and accounting products that CCH/Wolters Kluwer already offer.
A number of vendors have been talking about the concept of the modern accounting practice – a notion where practitioners and businesses work on the same data rather than the more traditional approach of brining customer data into a practice management system for manipulation. The final leg in the story of the modern practice however is that of documentation – accountants need to utilize providers of case law, precedents, best practices and standard forms and CCH is a major provider of these sorts of services – a practice solution that ties client and practice-side solutions, and delivers them alongside relevant documentation is a significantly valuable proposition for firms.
Wolter Kluwer obviously realize that they’re standing on a “burning platform” – that the ability to derive revenue from providing content is being seriously eroded by companies like Google. The natural answer to that threat is to tie existing content streams to deeply integrated vertical software offerings – given their coverage over the accounting profession – an iFirm, iBizz and content tie up is a natural fit. As APAC CEO Russell Evans said;
This acquisition will respond to the growing demand from accounting firms for genuine cloud-based software to support a 24/7, value-added service to clients while lowering cost of ownership. We firmly believe that cloud computing has the potential to transform how accountants work with their clients
The acquisition of Acclipse will complement CCH’s 2011 acquisition of Business Fitness New Zealand, a provider of practical content and workpapers to accounting firms, another example of an end-to-end integrated solution.
For Acclipse this gives them the ability to gain massively in terms of credibility and market awareness. The cloud practice management space is nascent at best – and with traditional practice management providers from MYOB and APS trying to find ways to deliver innovative and flexible solutions, we’re facing a paradigm shift not unlike the move from DOS to Windows-based software. Incumbents will be unseated and Acclipse obviously sees this deal as a chance to be the one doing the unseating.
This is a great exit for Chisholm – and a very interesting move in the accounting space in Australasia, and beyond.