Why we bought Acclipse: CCH explains
Adds iFirm practice management software to portfolio.
Tax and accounting services company CCH has acquired Acclipse and its flagship program iFirm, the cloud-based practice management software established by New Zealand software entrepreneur Mike Chisholm.
CCH was better known for print and subscription services which it has sold for 40 years to the accounting and legal industry in Australia. But the company was following the trend towards online services.
“Since 2007 we have had an expanding footprint in online software solutions. In acquiring Acclipse, Wolters Kluwer will offer both information and software solutions to accounting firms and their small- to medium-sized enterprise clients in the Asia Pacific market,” Greg Conway, senior communications adviser at Wolters Kluwer Asia Pacific, a global media company and parent of CCH, told BoxFreeIT.
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The Acclipse deal was one of a series of investments in cloud accounting software by CCH, part of Wolters Kluwer’s tax and accounting division. Last year it bought Business Fitness New Zealand, a resource library for establishing best practice in small and mid-sized accounting firms, and Corporate Tax Solutions from Ernst and Young, for enterprise accounting firms.
Last year the European arm of the Wolters Kluwer Tax and Accounting division bought Twinfield, a Dutch cloud accounting program that claimed to be the first and largest in Europe.
The terms of the Acclipse deal were not released. Acclipse claimed iFirm was used by 10,000 users at 1,000 firms mostly in Australia and New Zealand. Acclipse will become a business unit under CCH and its 55 staff will continue to be led by Chisholm.
BoxFreeIT asked Emma Watson, regional director of strategy, innovation and technology for Wolters Kluwer Asia Pacific, who led the Acclipse deal and Daniel Wyner, CCH’s tax and accounting segment manager, about CCH’s ambitions as a software company.
BoxFreeIT: Isn’t software development outside of CCH’s information business? The pace of development of cloud software is extremely fast, it’s not an easy game.
Emma Watson: CCH is a substantial software provider and developer globally. This region is unusual in that our brand recognition is still very tied to content. In 2010 we also bought a substantial software solution in the corporate tax space called Global Integrator and Tax Integrator from Ernst and Young. They serve a number of very large corporates in Australia and now globally. That’s not software development for the fainthearted.
We are also retaining the Acclipse team. Mike Chisholm has a strong history of developing software for accounting firms and one of the attractions of the business was their proven track record.
BoxFreeIT: Your relationships with accounting firms puts you in a powerful position for selling accounting software, doesn’t it?
Watson: We are in contact with the vast majority of accounting firms in Australia and New Zealand. That’s certainly one of the things that make it a natural fit for CCH and Acclipse. Both brands are well known in New Zealand but CCH has significant brand recognition in Australia.
Daniel Wyner: CCH is really a trusted adviser to the accounting firms out there from the large tier-one accounting firms all the way down to the suburban accounting firm. We are empowering the accounting firm to be the number-one adviser to their clients.
BoxFreeIT: What’s your relationship like with MYOB and Reckon now that you are in direct competition with them in practice management and soon general ledger accounting software?
Watson: We know from the market that there isn’t one solution that suits everybody. Our focus is primarily on our customers and we’re wanting to provide them with a single source of information to make them more productive. We think this acquisition takes us away from that features and benefits comparison when you look at individual software solutions.
Wyner: The important thing to note is that really what we’ve done here is shifted the needle. Yes MYOB and Reckon have an offering, but we have an offering that focuses on making an accounting firm the primary adviser to their clients. We can support them now holistically and that positions us in a totally different way.
The accounting firm can run their practice efficiently with that rich backup of content and knowledge and offer a collaborative solution rather than being piecemeal and offering bits of it.
Watson: The key driver is that we know that firms are trying to be more efficient. Software providers are not just putting software into the cloud, they are changing the workflow of accounting firms. The content in Business Fitness enables you to focus on being very efficient about a particular job and not on recording time.
Wyner: That’s key to the whole idea of moving to the cloud. Currently if I’m working in a desktop environment I’m sending my information via courier or I’m using some electronic dropbox to my accountant by unsecure means. It’s not proactive.
We are able to change that workflow and empower the accountant to work collaboratively with the firm. When they see there are issues that might arise in the future we are putting the power in the accountants’ hands here rather than waiting retrospectively.
Watson: We have bought all the products from Acclipse and iBizz is definitely part of it; it is due for launch shortly. CCH is very keen on this space largely because that’s what our core customers need and we see the need to diversify our service capability. The key thing for us is the focus on accounting products. iBizz is the collaboration engine for SME clients.
BoxFreeIT: Will you sell the Twinfield cloud accounting program in Australia as well?
Watson: No. From our point of view it’s very important that we have solutions that fit the local market. Acclipse was a natural fit for us in the Asia Pacific. They are a New Zealand-grown company that is established in New Zealand and has a developing position in Australia. We are going to provide an end-to-end position in this market. Business Fitness provides information on how to do things in an accounting firm and iFirm is an opportunity to provide great client service.
BoxFreeIT: What did the Business Fitness acquisition bring to CCH?
Watson: Business Fitness includes over 2,000 forms, templates and workpapers. It provides detail for a firm to do things like standardise specific jobs, workpapers to produce sets of accounts, and some real how-to guides on on how to be compliant and more efficient as a firm. It is fairly New Zealand based but there are elements that do have potential in other markets.
Wyner: We do have local content in Australia that when merged with Business Fitness will offer quite a compelling solution. We have the accountants toolkit of procedures and checklists for how to run a firm under best practice.
Next page: CCH’s formally lays out reasons for Acclipse acquisition
CCH sent BoxFreeIT a list of common questions and their answers regarding the Acclipse deal. An edited version of the list has been reprinted below.
Q. How much was Acclipse acquired for?
A. Terms of the signed agreement were not disclosed, which is normal in transactions of this nature.
Q. Why did Acclipse sign an agreement to sell its business to CCH?
A. CCH is one of the world’s largest providers of tax, accounting and audit information, software and services. The Acclipse suite, which was designed from the ground up to help accountants better service their clients, will now lie at the heart of what CCH does. It will help CCH leverage our deep subject-matter expertise, global presence, rich content assets and robust technology platforms to help accounting firms work hand-in-hand with their SME clients, and ensure ‘true collaboration’.
In New Zealand both CCH and Acclipse serve tax and accounting professionals. Following the acquisition of Business Fitness New Zealand content in 2011, all three sources will provide an extremely compelling offering for small- to medium-size enterprise (SME) accounting firms: Great content to guide them through the legislative requirements for their clients’ affairs; the practical “how to” work papers and templates for their day-to-day processes and tasks; and now great software to help them run their firms and collaborate with their clients. Together, this provides the only true, complete suite in New Zealand and will be a great way for both businesses to increase market share of the small- to medium-size enterprise accounting firm market in New Zealand.
With a great range of software solutions, combined with CCH’s brand and reach in Australia, it is a great way for Acclipse to increase penetration of the small- to medium-size enterprise accounting firm market in Australia.
Acclipse and CCH will be able to provide their customers with more options, leveraging the strengths of CCH’s content network and the practice systemisation provided by the Acclipse content platform to maximise the returns for existing and new customers.
In sum, the acquisition will bring to market a truly different offering than anything else available in the market today. It will build on the complementary strengths of the two organisations, in areas such as content generation, content management, service delivery, sales and marketing, as well as offering opportunities to leverage economies of scale.
Q. Why did CCH sign an agreement to acquire Acclipse?
A. CCH seeks to create strategic partnerships to better provide tax and accounting professionals with the integrated software and research products that help them address their daily challenges.
This acquisition will allow Acclipse to remain focused on its core competency – offering accountants and their clients great online accounting software.
The global reach of CCH and Wolters Kluwer allows Acclipse to expand the reach of its iFirm and iBizz products, and integrate these with relevant content sources to make accountants and their clients more productive.
Q. What is happening to Acclipse’s solutions? Will they be kept separate? Are they merging with CCH’s portfolio? Are any being phased out?
A. Acclipse will be run as a separate business unit called “Collaborative Solutions” within Wolters Kluwer Asia Pacific. Mike Chisholm, CEO of Acclipse, will become the CEO of Collaborative Solutions Asia Pacific.
The new business unit will sell solutions under the new brands, CCH iFirm and CCH iBizz.
CCH is committed to serving the specific needs of customers of all sizes with best-of-breed solutions, and as the Acclipse business is complementary to CCH’s existing content products including Business Fitness New Zealand content, it makes sense to look at options to provide customers the benefits of integrating these content solutions with Acclipse’s software solutions.