Cloud accounting platform FreeAgent has agreed to a takeover bid from the Royal Bank of Scotland this week. CEO Ed Molyneux and the rest of the board have accepted the offer, which values FreeAgent at approximately $75 million (£53 million).
In a blog post announcement, Molyneux said that the acquisition will allow the company to progress toward its vision and improve the FreeAgent platform for both 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,” he added.
This agreement comes just over a year after FreeAgent began working with RBS. The two formed a distribution partnership last January in which RBS offered FreeAgent’s accounting software services to its small business clients. The deal will help both parties leverage new opportunities to offer a more integrated banking and accounting experience for small businesses since, as Molyneux said, “the lines between banking, accounting and tax are becoming increasingly blurred.”
After the deal is closed, FreeAgent will continue to operate business as usual. In a Q&A, Molyneux said the company has “no intention of significantly changing the way that [it does] business with [its] customers.” FreeAgent shareholders will receive $1.70 (120 pence) per share. This represents an 86% premium to yesterday’s share price and a 43% premium to the IPO price of $1.19 (84 pence).
Founded in 2007, FreeAgent offers cloud accounting services for small businesses, an API for easy integration, and integrations with existing startups such as Basecamp, Stripe, PayPal, and Xpenditure. The company also has an offering for accountants and a fully-integrated payroll system.
Molyneux debuted FreeAgent’s Financial Health Insights at FinovateEurope 2013 in London. Since then, the company went public in 2016 and last month launched the Customer Sales Report, which allows businesses to see how much income they’ve received from each customer.