MYOB products have been sold in Asia for almost 10 years and MYOB has been servicing the growing Chinese SME market through its Hong Kong operation since 2000. The joint venture with Jin Cai extends MYOB's Asian operation into mainland China with the local expertise of an existing enterprise. MYOB is investing A$2 million to attain a 95% shareholding in Zhi Guan Technology, the joint venture company, including around A$1 million of deferred consideration should performance hurdles be achieved over the two year period ending 31 December 2007.
The joint venture company will acquire the existing Jin Cai business. MYOB will also receive an option to acquire the remaining equity in the joint venture company.
China has a rapidly developing economy experiencing a high rate of computerization. Accordingly, a growing number of small-to-medium business owners are adopting computerized business management solutions. MYOB has been investigating its options in mainland China in recent years, and is now ready to realize the opportunity of adding this significant new market to the company's global customer base.
MYOB will fund an investment in marketing and development for the business over the next three years to build a strong market position in mainland China. MYOB will provide further information in relation to this investment in coming months.
MYOB Chief Executive Officer, Craig Winkler said, "We've been evaluating the extension of our Hong Kong operation into mainland China for some time now, and researched our options thoroughly. We are pleased to be moving into the operational phase of taking on a new world of MYOB customers. MYOB's experience around the globe, coupled with the local knowledge of our partner and our wider Asian operations, puts us on a firm footing for long term success."
MYOB will adapt its existing products for Chinese businesses, an undertaking in which the company already has considerable experience. Bilingual English/Chinese MYOB software products are already available in Hong Kong today.
About Myob Group Ltd
MYOB Group Ltd (ASX:MYO) is a leading provider of online business management solutions. It makes business life easier for approximately 1.2 million businesses across Australia and New Zealand by simplifying accounting, payroll, tax, practice management, CRM, job costing, inventory and more. MYOB provides ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly through its Connected Practice Strategy and through the development of the MYOB Platform. For more information, follow @MYOB on Twitter or visit http://investors.myob.com.au/Investors
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