Class Limited announces strategic acquisition of ReckonDocs
Class Limited (ASX: CL1), Australia’s leading SMSF technology platform, has today announced it has acquired ReckonDocs, the documentation service of accounting software provider, Reckon.
The transaction includes the complete acquisition of the ReckonDocs platform and customer base, for an enterprise value of $13m adjusted for working capital. The transaction has a target completion date of March 1 and is expected to be earnings accretive in FY22.
ReckonDocs is currently used by more than 2000 businesses in Australia, and one in seven Australian companies are registered through the platform. Its product suite – including company registrations, trust deeds and SMSF deeds – is a natural fit for Class and its services will be incorporated into Class’ NowInfinity platform.
The ReckonDocs acquisition fast tracks Class to a market leadership position in the new market segment following the acquisitions of NowInfinity in January 2020 followed by Smartcorp in August 2020.
“We will continue to strategically grow the Class business to ensure we provide our customers a world-class offering and build leadership positions in the markets in which we operate,” Class CEO and Managing Director, Andrew Russell, said.
“This acquisition will accelerate the market leadership role Class will play in the legal documentation and corporate compliance marketplace and allow Class to drive industry innovation as we have achieved in the SMSF administration market with Class Super. The addition of ReckonDocs will see Class with approximately 14% market share by revenue of the corporate compliance and documentation segment.
“We are committed to delivering our customers the most comprehensive and integrated suite of services available in the markets we operate in, and this acquisition will also deliver ReckonDocs clients an expanded set of products and services to add further value to the relationship.”
Reckon CEO, Sam Allert, said, “Reckon’s strategy is now focused on small business accounting and payroll, and practice management for accounting and legal firms and the strong synergies this brings across our addressable markets. Consequently, we have taken the decision to divest the ReckonDocs platform to Class Limited. The acquisition provides ReckonDocs customers with access to the market’s leading document platform and product set. This also creates an opportunity for two market-leading software companies to partner and integrate our products to provide an integrated wholistic solution to accounting firms.”
Class has a well-recognised and established market share of almost 30% in Australia’s SMSF administration software market with a customer retention rate of over 99%. According to Investment Trends research in June, Class was the fastest-growing SMSF provider and the most favoured platform for accountants looking to change SMSF platform provider.
