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Reducing debt and securing an acquisition pool of capital are the goals behind accounting software firm MYOB's $A125 million listed note offer.
The $A1.2 billion, 2011 sale of the accounting software firm to its second private equity firm, US-based Bain Capital, was financed by a $A530 million five-year loan.
In a statement this morning, the company says MYOB Finance Australia wants to raise $A125 million, with the ability to raise less or more.
The offer is being made to institutional investors, retail broking firms and the Australian and New Zealand public.
As expected, the subordinated notes will have a five-year maturity and pay a floating rate between 6.7 and 6.9 percentage points over the bank rate, at an initial minimum of 10%.
The MYOB statement says the money will be used "partly" to repay debt and make a capital return to Bain Capital, "who may reinvest those proceeds in future product development or for acquisitions by MYOB, return it to its ultimate owners, or use the proceeds itself at its discretion".
The issue price is $A100 per note and the minimum is $A5000.
A prospectus has been lodged with ASIC, a bookbuild will take place on December 3 and the offer opens the following day.
Notes are expected to be issued on December 20, with ASX trading to start on December 21.
MYOB’s chief executive Tim Reed says the notes offer gives investors the opportunity to get a slice of a leading business management company in Australia and New Zealand.
"MYOB generates strong cashflow and benefits from a high proportion of recurring revenue.
"Our recent investment in cloud technologies, such as the MYOB Live product suite, is an important part of our strategy to grow our client base and further strengthen our market position as an online solutions provider.”
The capital raising is led by Deutsche Bank, Morgan Stanley and UBS, with ANZ Securities, Macquarie Capital and Westpac Institutional Bank.