MYOB buys fintech Flare, moves ahead after ‘semi-ignorant’ reaction to ANZ talks

Less than a week after ANZ confirmed the discussions, the lender announced it had bought Suncorp’s banking arm instead, walking away from talks with KKR.

Ellis told The age and Sydney Morning Herald said he believed ANZ was initially interested as management understood the importance of what MYOB could offer “within the financial services framework – 2.8 million people are paid, $11 billion worth of gross payrolls put through our system every month”.

“We can see the amount of money both in terms of short-term and long-term debt that our customers have, and obviously they’re a bank that’s interested in lending money,” he said.

“So I think the market reacted semi-ignorantly, frankly, around the synergies of this.

“As to why it didn’t go ahead, ultimately, in the end, that’s a question you have to ask ANZ … it’s public knowledge that they were also in discussions to buy the Suncorp assets. I think it’s not unreasonable to conclude that there was some congestion at the ANZ level.”

Ellis said the possibility of a future sale of MYOB was a matter for KKR.

“We are owned by private equity. And as you know, with the private equity model, eventually they sell, but right now we’re just focused on running the company. We are not in discussions with ANZ or anyone else, we are back to running the business.”

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Flare’s co-founders Windon and Daniel Cohen, who will continue in fintech, said they were excited about the deal after working with MYOB. Windon said the couple had confidence in MYOB, even though it was sold on the pitch.

“This is a private equity firm, they care about growth, they care about dynamism, they care about actually taking a business and making it … bigger, better, faster, stronger,” he said. “The fact that they’re trying to grow quickly, and are looking for us to grow quickly and independently, I think that’s what’s attractive.”

“MYOB has been owned by several people over the last 30 years, but here it is, still to this day, an iconic Australian company. It’s a company that mum and dad know.”

The co-founders said their research showed that in both small and large companies, employees expected more from their employers, particularly around flexibility and telecommuting, but also when it came to benefits and workplace wellness initiatives.

The tight job market and subsequent battle for talent has accelerated this trend, Windon said, giving Flare a window to grow the business.

“It’s been a really big opportunity for us to step into.”

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