TechnologyAcquisition duo provoke uncertainty

Acquisition duo provoke uncertainty

Two large acquisitions of accounting software groups by what are predominantly publishing companies have fired debate over whether end users will benefit from these takeovers

Martin Casimier

Martin Casimier: well matched

In a hectic few days last week, Wolters Kluwer took control of the UK
accounting division at MYOB and Thomson Corporation bought tax software company
Digita.

Both Thomson and Wolters Kluwer have accountancy software and business
solutions as part of their brand, but are primarily known as multi-media
companies.

It is hoped that by expanding their reach in the accounting software market,
the publishers will be able to provide their content and data to a new market
via desktops.

Wolters Kluwer’s technology division, CCH, is a considerably smaller vendor
than MYOB and is backing the acquisition to strengthen its market position and
expand capability.

Martin Casimier, managing director of CCH, says: ‘If you look at our
products, they are well matched. Where we are weak they are strong and vice
versa.’

Perhaps predictably Martin Leuw, chief executive of rivals Iris, appears
unconvinced by the merits of the deal. He says CCH is part of a ‘vast
international publisher and its software interests represent a minority of their
UK business…software is our core business, it is not theirs’.

CCH as yet has no plans to merge the products, and Casimier says ‘there are
no immediate plans to integrate’ and that they will ‘continue to operate
individually’.

Digita and Thomson Corporation are in similar circumstances with their recent
buyout.

Thomson has various business solutions for the healthcare, scientific and
legal markets including Thomson Tax and Accounting software which is provided
globally. Digita, best known for its tax software, will join Sweet &
Maxwell, the legal and regulatory publishing arm of Thomson.

Helen Owers, chief operating officer at Thomson International Legal &
Regulatory, says the purchase of Digita ‘will build on Thomson’s recent
acquisition of PowerTax in Australia, as well as its leading tax and accounting
software and services portfolio in North America’.

The Thomson deal will provide Digita with a vastly expanded range of products
to offer users, which could see the group make rapid gains in market share. The
same could be said of CCH.

But Leuw doesn’t seem to be overly worried by the development, arguing that
the new market entrants will focus on the top 20 firms, leaving the smaller
practices to Iris.

The next 12 months will tell whether he is right.

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