Self-taught software engineer Dan Houden toiled away in his bedroom for six years to come up with the code that looks set to land his family a $100 million-plus payday.

The software that underpins countless transactions for pubs, restaurants and other hospitality businesses put Sydney-based the Task Group on the radar of larger global rivals, one of which this month lobbed a takeover bid that valued it at $310 million.

The Houden family (from left): Dan, Kym, Jenny and Dean. Edwina Pickles

The Houden family, which still owns about 36 per cent of Task, has recommended shareholders sign off on the deal with New York-listed PAR Technology Corp in June. They plan to cash out half of their holding and roll the rest into PAR scrip.

It’s a far cry from 16 years ago, when Mr Houden thought his entrepreneurial idea had actually killed the business his mum and dad founded in their garage at the turn of the century.

Initially, the company Kym and Jenny Houden started on Sydney’s northern beaches resold Quest point-of-sale hardware and software to hospitality venues.

Kym Houden can trace the roots of the business back to 1978, when, at 22, he started importing Japanese cash registers for Australian shops. Two decades later, he twigged that the looming introduction of the GST meant hospitality venues would need to upgrade their systems.

“I went down to Melbourne to what was known as the Telstra Dome, and they were installing over 400 terminals, which gave me goosebumps,” Kym Houden told AFR Weekend.

He decided to launch his own point of sale company, and the ink on the business cards was still wet when Task landed its first sale in March 2000: seven terminals to a pub for $60,000.

Sons Dan and Dean joined the business, and frequently ended up travelling to nightclubs and pubs at all hours to troubleshoot systems that had stopped working.

After fielding requests from clients for product improvements that were never delivered by the manufacturer, the Houdens started searching for more modern software to on-sell. When they couldn’t find anything, Dan Houden decided in 2002 to build it himself.

When Task’s supplier found out it was developing its own product, it cut the business off from its finance plans – from then on, Task would have to pay up front for any of the supplier’s product it sold.

“We’re sitting around the living room and I thought, ‘oh no, what have I done?’,” Dan Houden recalls. “We had a great business that dad had started with a $5000 credit card, with no debt, nothing.

“It was scary. That moment for me has embedded this level of urgency, which I still hold today. I felt personally liable for stuffing up what was a great business.”

Kym Houden (left), can trace the roots of Task back to 1978 when he travelled to Tokyo to import point of sale terminals into Australia. 

Developing proprietary software catapulted Task to much larger contracts – the first sale in 2008 was worth more the $600,000 – and international customers.

Task never took outside funding and reinvested almost every dollar of profit back into the business. Over the years, the goals of the two generations started to diverge: Dan and Dean wanted to grow the business, Kym and Jenny were looking towards retirement.

That opened the door to discussions about the next phase of growth. Corporate adviser Hugh Richards, from Latimer Partners, came on to work on potential deals.

Task came close to landing an all-cash deal with a US-based $20 billion competitor in early 2020. But COVID-19 put a pin in the negotiations in Las Vegas after Kym and Dan Houden flew back to Australia to isolate.

“It gave us time to pause and figure out that we didn’t want to do a cash sale,” Dan Houden said. Plus, the two brothers wanted to stay involved in the business.

Eighteen months later, Task was acquired by New Zealand marketing software company Plexure Group, the digital name behind the McDonald’s app, for $120 million. The deal gave Task shareholders 43 per cent ownership in Plexure.

After some restructuring on the Plexure side helped get cash flow positive again, the Houdens were ready to hear PAR chief executive Savneet Singh’s pitch.

Earlier this month, Task endorsed the PAR offer of 81¢ a share. Shareholders can also opt to convert up to 50 per cent of their holding to PAR scrip. Shareholders will vote on the deal in June.

By Tess Bennett | Financial Review 27 March 2024