Australia’s competition watchdog has stated it will not oppose a merger between two local accountancy software vendors.
The Australian Competition and Consumer Commission has effectively given the green light for MYOB to acquire GreatSoft.
The ACCC had investigated whether GreatSoft had the potential to grow into a strong competitor, given that it had succeeded in winning a number of medium-to-large customers, including MYOB customers, when it first launched its product in 2019.
However, the watchdog concluded that GreatSoft will likely face challenges expanding its small customer base in the short- to medium-term if the acquisition does not go ahead.
“GreatSoft’s growth has been limited since it entered the market and we saw little evidence that it would grow to be a significant force in the market in the short- to medium-term,” ACCC commissioner Stephen Ridgeway said.
“GreatSoft would have to manage market uncertainty arising from this transaction, maintain integrations with third parties, some of whom are competitors, and its prospects did not look good given it has missed the prime selling window for accountants to switch on 1 July.”
The ACCC said that following the proposed acquisition, MYOB and GreatSoft would continue to face significant competition from other desktop and cloud-based providers of practice management software, including Xero and Reckon.
“Although Xero Practice Manager has been designed for smaller firms, it continues to attract a number of medium-to-large firms to its cloud-based product and will impose a strong competitive constraint on a combined MYOB and GreatSoft,” Ridgeway said.
“We are pleased with the outcome announced by the ACCC today and look forward to expanding MYOB’s portfolio of cloud business management solutions with the addition of GreatSoft Australia’s practice management software," MYOB said in a statement.
“The success of our accounting partners is important to us, and this acquisition will increase our offering of leading SaaS solutions to accounting practices across Australia."