Rumors that Australian accounting software vendor has called in Macquarie for advice about a potential hostile takeover bid that is emerging.

It would be easy to think that other than the three global small business accounting vendors (those three being Intuit, MYOB, and Sage), the only other vendor of note is Xero. For those who don’t follow the space, the small business accounting space has been historically carved up under geographic boundaries with Intuit taking the US market, Sage the UK and Europe and MYOB Australasia. Xero, an upstart cloud-based vendor based in New Zealand has come on the scene in recent years and is targetting a global play.

But outside of these players, there are smaller vendors still around. One of these is Australian listed company Reckon. Reckon actually has a somewhat sordid history with Intuit. Reckon sold Intuit’s QuickBooks product in-region and alongside that deal, Intuit held an equity stake in the company. That relationship went sour, for reasons I will elaborate on later and Intuit decided to take over control of the QuickBooks product in Australia and to sell its stake int he company.

Part of the reason for Intuit wanting to focus on the Australasian market was that Xero has, since its inception, been poking the sleeping Intuit bear. The feeling I get is that Intuit is investing heavily in the Australasian market in part because it is a lucrative part of the world but more because it sees the battle with Xero as personal and wants to crush the upstart.

Given all fo that context, it is fascinating to hear that someone is looking at acquiring Reckon. The company has a strong presence in accounting practices but has proven very much subpar in building out a client-side solution. Its ReckonOne client-side product has been on its way for many years now but is still to see the light of day.

Given Reckon’s abject failure to modernize, why would anyone be looking to buy the company? Well, how’s this for a theory, buying Reckon and integrating its client-side product in with an existing accounting practice solution would deliver an end-to-end accounting solution which would compete strongly with the incumbent products in the market.

And which accounting software vendor doesn’t have a strong practice-side solution? You guessed it, Intuit. Of course, there are other potential suitors – MYOB itself, Wolters Kluwer‘s Australian unit CCH, Xero or perhaps Sage. But my guess would sit with Intuit. CEO Brad Smith is an affable chap, but it seems to me that he’s on a mission to damage Xero critically, a purchase of Reckon would help him with that aim. Watch this space.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

  • Wow! What a scoop! Reckon shares up 9% on last Friday.

    I agree 100% re: Intuit. Who else has $235m to burn? Intuit has “hit an inflection point” with takeup of QBO in Australia apparently. Intuit will get a nice cash business in practice management but the biggest asset will be a host of loyal partners to sell QBO even faster.
    A lot of money for a small market, though.

  • I heard another (better) theory. CCH recently hired Reckon #2 Pete Sanders as MD of CCH Australia. He knows how Reckon works and what it’s worth. And CCH could upsell its expanding suite of products to Reckon’s valuable list of APS clients.

    So – two good possibilities!

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.