Royal Bank of Scotland to buy accounting software firm FreeAgent
The Royal Bank of Scotland has announced a bid to buy the Edinburgh-based accounting software group FreeAgent for £53m.
“Since the beginning of our partnership, we have been impressed by FreeAgent and its technology and are excited by the enhanced offering we will be able to provide to our customers,” said RBS chief executive Ross McEwan.
“We believe that a technology-enabled solution for our business banking customers will make it easier for our customers to build their businesses safely and securely.”
FreeAgent investors would receive 120p in cash per share, representing an 86% premium on yesterday’s closing price and a 43% premium on the company’s IPO price.
Co-founder and chief executive Ed Molyneux said: “I, along with the rest of the board, have thought hard about this and we are recommending that shareholders accept the offer.
“This offer provides us with a unique opportunity to progress towards our vision that we set out in 2007 when the company was founded, and to invest heavily in FreeAgent, making it even better for our customers and partners. As part of a larger organisation we want to accelerate our growth ambitions in the micro-business and accountancy practice space, as well as significantly improve our core product.”
Founded in 2007 by former RAF fighter pilot Ed Molyneux, the software lets users file expenses and invoices, check your cash flow and stay on top of taxes. Freeagent and RBS are already commercial partners; the bank offers FreeAgent’s accounting software to its business banking customers.
Molyneux added: “Since we have been working together, our partnership with RBS has taken off and they share our vision of making businesses happier and more successful by putting them in control of their finances.
“The lines between banking, accounting and tax are becoming increasingly blurred and there are new opportunities for a more integrated experience between banks and accounting software that we believe will benefit businesses.”
Molyneux said that he and fellow co-founders, Olly Headey and Roan Lavery, would continue to lead the company. If the deal goes ahead, he said, “we will be an operationally independent member of a much bigger organisation. We hope that the move will provide access to the greater financial resources of RBS, and opportunities for faster growth and strategic integrations that we couldn’t do alone.”
He said existing customers will still be able to use FreeAgent regardless of whether they bank with RBS: “We will continue to support our existing customers in the same way we have done, and pursue our existing micro-business and accountancy practice sales channels.
“We have no intention of significantly changing the way that we do business with our customers. The formula works and RBS are buying us because of the successes that we have had.”