RBS have announced they are buying Freeagent, which is cloud accounting software, for £53m.
Is it a good thing or a bad thing? Apparently, your bank business manager will have access to your data, so presumably would spot more quickly how a business is doing. Hit a cashflow problem and we could see the bank quickly calling in overdrafts and loans or hit a good patch and be inundated with loan offers?
I think for the bank it's an incredibly good deal, but I'm not so sure for the business person.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
" Apparently, your bank business manager will have access to your data,"
That sounds wrong - surely they should only have access to it if you have authorised them to do so. (And don't forget there will be non-RBS customers using it, so it can't possibly a condition of its use.)
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
This is significant. First purchase since 2007 (ABN Amro) and then they choose to pay £52m for a company with £8m turnover, £3m in assets, but share premiums doubled over the past year making it look as though an acquisitions been expected by the market for a while... You would think that for the first they might have driven a better bargain as this one's going to be seriously scrutinised in the press.
Not seeing any economies of scale to be had there so there must be some serious growth expectations for Free agent.
As indicated above I would expect the business offerings to be expanded to incorporate Free agent on the banking platform but that aside, have they overpaid for the first acquisition in 11 years? We're supposed to be at the tail end of the latest acquisition cycle so dipping toes in acquisitive waters is really only for the brave or the foolhardy... Which is what surprises me that they've chosen now to pay a fair wedge for the purchase. Very interested to see how discussion on this one plays out in the FT.
Many thanks for sharing John.
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
BTW, what the thinking with your new profile picture - and therefore what theme? Sheep specifically? Farm animals in general? Food?
Think that it was a sping thing Vince.
Thinks....
Which is actually sad rather than funny so not having that one as an avatar.
Ok, they might be 14 foot killing machines but...
-- Edited by Shamus on Wednesday 28th of March 2018 11:58:57 PM
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
This is significant. First purchase since 2007 (ABN Amro) and then they choose to pay £52m for a company with £8m turnover, £3m in assets, but share premiums doubled over the past year making it look as though an acquisitions been expected by the market for a while... You would think that for the first they might have driven a better bargain as this one's going to be seriously scrutinised in the press.
Shaun.
Imo, they are great at acquisitions (scarcasm fuelled comment), just look how well they did with NatWest and ABN Amro.
They are also very good at selling off the family jewels. (no sarcasm here!). Oh yes, bank in trouble, lets sell all the very best profit making bits (all NWB btw) and keep the shi*te.
Then plan to close all the RBS branches in England and retreat to Scotland, whilst selling the NAtWest branches in Scotland and keeping the ones in England......good plan. But oh noooooo, renege on that and close all the Natwest branches where there are RBS ones, in many English towns, leaving vaste swathes with none of the better bank branches of the two.
TBH always were a shower of sh*te for brains disorganised, couldnt run a party in a brewery bunch, nothing has changed.
Now they will be using the data entered by business owners who haven't got a clue how to do bookkeeping to beat them over the head with an almighty stick whilst calling in their overdrafts and loans based on that duff data! (Customers only!!)
Despite it being cloudy stuff, I was hearing good things about Freeagent, but if AWeb is anything to go by, a lot of Accountants out there won't be recommending it as much as they did before.
As a NWB client I might download it and mess with someones head with some data entry and see what happens!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
This is significant. First purchase since 2007 (ABN Amro) and then they choose to pay £52m for a company with £8m turnover, £3m in assets, but share premiums doubled over the past year making it look as though an acquisitions been expected by the market for a while... You would think that for the first they might have driven a better bargain as this one's going to be seriously scrutinised in the press.
Shaun.
Imo, they are great at acquisitions (scarcasm fuelled comment), just look how well they did with NatWest and ABN Amro.
They are also very good at selling off the family jewels. (no sarcasm here!). Oh yes, bank in trouble, lets sell all the very best profit making bits (all NWB btw) and keep the shi*te.
Then plan to close all the RBS branches in England and retreat to Scotland, whilst selling the NAtWest branches in Scotland and keeping the ones in England......good plan. But oh noooooo, renege on that and close all the Natwest branches where there are RBS ones, in many English towns, leaving vaste swathes with none of the better bank branches of the two.
Hi Joanne
I thought that's what they were still doing, did they change their mind?
I was in Leeds today and I walked past a Natwest Bank, and on the opposite side of the road a bit further down was a RBS!! I was gobsmacked because we are losing our Natwest in Ripon. Just looked on the closure list and neither are closing.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
The avatar is to celebrate Spring, if and when it eventually gets here! I'm assuming the information available to the business manager is only if you bank with them. They've been dishing clearbooks out with new accounts for a little while now.
Hi Shaun
Ooops, a little overpriced then However they may have already offered a lower price and been refused. That happened to a local bus company (quite successful) and one of the lesser known nationals had made 2 or 3 offers which had already been refused. They then made an offer that the joint owner said was too good to refuse.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Leger wrote:However they may have already offered a lower price and been refused.
Sounds like they're channeling the business approach of Fred the shred.
Some managers will not back away from a deal even when it becomes a bad deal as they cannot be seen to lose. If thats the case then there was someone else in the bidding as no way that they opened at nearly seven times turnover and five times value (which includes a rather large share premium that will disipate with the share price post acquisition).
Of course, there are many reasons for acquisition. Stopping competition gaining technology. Acquiring technology as a platform product. Ensuring that you are part of a movement so you are not seen to be left behind. Entry into new markets. Investment, etc. etc. I include that last one as if the bank does not believe that we are at the end of an acquisition cycle then companies have been known to acquire at stage 2 or 3 to divest before the end of the current cycle.
I think that the bank may be right as Brexit has thrown the normal timelines so making small acquisitions that hardly appear as a blip on the balance sheet when others are shunning acquisitions does make some perverse sense and certainly at 53m they're not exactly playing with fund that they can't afford to lose. To quote a phrase "it's a p*ss in the ocean".
It also sends a signal that if a banks making acquisitions, especially the first acquisition in 11 years. Then others should look at acquisitions.
New consideration... If yoiu werre a Government going through Brexit and you owned a bank... What might you get it to do????
When I first posted my last line was originally
"Now cry havoc and let slip the Joanne" as I knew from our similar shared heritage in banking that she would go after the goldfish (the old saying in banking is "How the hell did a goldfish swallow a whale" talking about an insignificant provincial bank (a goldfish) acquiring ownership of a banking behomoth (a whale)). Both of us worked for the Whale during it's time of transition.
I disagree with nothing Joanne says (no change there then).
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
New consideration... If you were a Government going through Brexit and you owned a bank... What might you get it to do????
Cynical but possibly true. As you say, the amount is nowt to them and could explain why they paid over the odds for it. Long term effect could be beneficial if it kickstarts an economy that is struggling to fight it's way out of the doldrums but I am worried about retail. Its teetering on the edge somewhat and could well topple over and that could bring a new recession.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
RBS will eventually I suspect offer FA free of charge to their small business customers.
RBS will obviously use it as a tactic to try to persuade existing FA customers to switch banking to them.
Doesnt have any impact on us as we have no freeagent clients and dont want any. We did have one FA client until last week but they have moved to another firm when we gave them our fee proposal for the next year (no tears shed as they were our No1 client to exit).
However they may have already offered a lower price and been refused. That happened to a local bus company (quite successful) and one of the lesser known nationals had made 2 or 3 offers which had already been refused. They then made an offer that the joint owner said was too good to refuse.
