MYOB successfully completes offer and issues $155 million of subordinated notes

MYOB Finance Australia Limited (the "Issuer"), a member of the MYOB group of companies (“MYOB”), today announced the successful completion of an offer of MYOB Subordinated Notes (the “Offer”), raising $155 million in total.

MYOB is a leading provider of business management, accounting, payroll and tax software in Australia and New Zealand. On 26 November 2012, the Issuer launched an Offer of MYOB Subordinated Notes ("Notes") at $100 each to raise $125 million, with the ability to raise more or less.

On 4 December 2012, MYOB announced the allocation of $150 million of Notes on a firm basis to brokers and institutional investors. After closing the General Offer, the final size of the Offer was capped at $155 million. Today, 1.55 million Notes were issued at $100 each.

The net proceeds will be used to partly repay senior debt facilities that were used to finance the acquisition of MYOB and make a return of capital to the current owner of the MYOB Group, 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.

MYOB's Chief Executive Officer, Tim Reed, said, "We are very pleased with the level of investor support shown for the Offer during this exciting stage of MYOB's development. The strong demand for the Notes, which was capped at an Offer size of $155 million, reflects the market’s confidence in MYOB's ability to leverage strategic opportunities and reinforce our position as a market leader in management solutions to SMEs and accountants in Australia and New Zealand."

Interest Rate
The interest rate for the first interest period is 10.00% p.a. This has been determined for the first interest payment in accordance with the Note Terms of Issue as the higher of 10.00% p.a. and the 90 day BBSW on 20 December 2012 (being the Issue Date) of 3.15% plus the Margin of 6.70% p.a.

Following the first interest period, the interest rate will be set quarterly. The interest rate will be equal to 90 day BBSW plus the Margin, which has been set at 6.70% p.a., subject to a minimum interest rate of 10.00% p.a. for the first 4 interest periods.

Allocation Policy
The Notes allocation policy is described below:

- General Applicants under the General Offer have had their application scaled back having regard to the level of demand for the Offer.

Application                           Allocation

1 to 200 Notes                     100% of their application
201 to 300 Notes                85% of their application
More than 300 Notes         59% of their application

- Allocations to Syndicate Brokers and Institutional Investors were determined pursuant to the Bookbuild completed on 3 December 2012.

- Allocations to Broker Firm Applicants by a Syndicate Broker were at the discretion of that Syndicate Broker.

Applications that were accompanied by cheques that were subsequently dishonoured, and online applications for which BPAY® payments were not received, have not received an allocation.

General Applicants can obtain information about their allocation of Notes by calling the MYOB Subordinated Notes Offer Information Line on the numbers provided below.

Broker Firm Applicants should confirm their allocation of Notes with their Syndicate Broker. Institutional Investors under the Institutional Offer have been individually advised of their allocation of Notes by Deutsche Bank, Morgan Stanley and UBS.

Trading on ASX
Notes are expected to commence trading tomorrow (21 December 2012) on the Australian Securities Exchange ("ASX") on a deferred settlement basis at approximately 12.00pm (Sydney time) under the ASX code of “MYBG”.

Trading of Notes on a normal settlement basis is expected to commence on 27 December 2012.

All applicants are responsible for confirming the number of Notes allocated to them prior to selling any Notes. Applicants who sell Notes before receiving their Holding Statement or CHESS confirmation do so at their own risk (even if they obtained information on their allotment from the MYOB Subordinated Notes Offer Information Line or from their Syndicate Broker).

Holding Statements and Refund Cheques
Holding Statements stating the number of Notes issued to each successful applicant (or CHESS confirmations, in the case of successful applicants who are CHESS holders) are expected to be despatched on 24 December 2012. Any refunds are also expected to be despatched on this date.

Newspaper Advertisements
Tomorrow, MYOB will advertise the close of the Offer, the Issue Price of each Note and the basis of allocation of Notes, in The Australian Financial Review, The Sydney Morning Herald, The Age and The Australian. A copy of this advertisement is attached to this announcement.

Information about Allocation of Notes or the Offer
To obtain information about their allocation of Notes or about the Offer,Applicants may call their Syndicate Broker or the MYOB Subordinated Notes Information Line on 1800 868 464 or +61 2 8280 7798 (Monday to Friday – 8.30am to 5.30pm).

About MYOB Group

MYOB is a leading provider of business management, accounting, payroll and tax software in Australia and New Zealand, supplying its software, services and support to small and medium sized enterprises (“SMEs”) and public accountants. MYOB's solutions extend online, delivering innovation through cloud computing solutions such as  LiveAccounts and the recently launched AccountRight Live. This enables its clients to be more productive, supporting more streamlined connections with their staff, business partners, business advisors and customers. MYOB estimates it currently holds a market share of approximately 60–70% for SMEs and approximately 60–70% for public accountants, by revenue from sales of these products and services in Australia and New Zealand. MYOB believes clients value the ease of use, reliability, integrated nature, ongoing regulatory compliance updates and client support services that it provides. MYOB commenced operations over 20 years ago and now supports nearly 1 million businesses, predominantly SMEs, and more than 40,000 accountants across Australia and New Zealand. MYOB employs approximately 860 staff and is headquartered in Melbourne, Australia. It has four key business divisions described in Section 3.4 of the Prospectus, which are supported by group functions including finance, strategy, marketing, IT, legal and human resources. For the 12 months ending 30 September 2012, the MYOB Group generated $212.7 million in revenue, $98.5 million in pro forma EBITDA ($22.7million pro forma NPATA and a pro forma NPAT loss of $19.2 million) and a pro forma EBITDA margin of 46.3%. Funds advised by Bain Capital became the majority owner of the MYOB Group in September 2011. Bain Capital has a significant history of advising on investments in software and business services companies globally.