Accounting firm MYOB made a strong debut on the Australian stock exchange yesterday with shares jumping 7 per cent by mid afternoon.
The Australian-based accounting firm listed on the exchange at noon, with 228 million shares, or about 40 per cent of company equity, sold as part of the float.
Shares were sold at a listing price of A$3.65, which rose to A$3.92 before easing back to close at A$3.89, giving it a market capitalisation of A$2.3 billion.
Mind Your Own Business chief executive Tim Reed said he was proud of the company's progress.
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Rival accounting software company Xero's chief executive, Rod Drury, took to Twitter to applaud the company, saying: "Congratulations @MYOB investment and competition is great for small business."
MYOB said it had received interest from investors globally and its main shareholder, Bain Capital, would retain about 58 per cent of the company, after its previous 95 per cent stake was diluted by the new shares.
"In the past six years as a private company, we've transformed MYOB into a wonderfully innovative business that continues to focus on the needs and challenges of SMEs," Reed said. "We will welcome our new investors to participate with us in our growth as more and more small businesses head to the cloud to manage their accounts."
MYOB was founded in 1991 and provides accounting and business management software for customers in New Zealand and Australia, and has spent more than $104 million on research and development (R&D) in the past three years - something Reed said gave the company an edge in the Australasian market.
"By focusing our R&D on Australia and New Zealand, we believe our cloud solutions are an excellent fit for businesses and accountants in this exciting market segment," he said.
Xero and MYOB are viewed as major rivals in the online accounting space. Before the listing, analysts had said they were sceptical about how much the listing would affect Xero, with Forsyth Barr analyst Blair Galpin saying the offer had been flagged for a long time and was unlikely to affect Xero's share price.
"It's been well known and it's no surprise to the market that it is actually happening," Galpin said. "The real question that there will be is - how successful is the IPO?"