LONDON: Accountancy and business software maker Sage Group Llc, said it has acquired US-based Verus Financial Managament – the firm specialising in payment processing.
The £184m cash and debt deal will allow Sage to expand in North America where the demand for automation of business processes such as cheque, debit and credit card processing, has been growing. Verus has 1.01 million small and medium enterprises (SMEs) customers – retail as well as Internet-based firms, in the US. These customers include restaurants, petrol stations, property managers, motor dealerships, etc.
The acquisition will give Sage access to these customers for its own accountancy software. At the same time, Sage’s own customers will benefit from Verus’s merchant payment services that Sage will integrate into its own offerings. Sage’s SME customers have been saying that they find “running payroll services increasingly burdensome” finance director Paul Harrison said.
Paul Walker, chief executive of Sage, said Verus’ automated payment services and Sage’s own CRM products and payroll services will expand the range of “Sage solutions beyond pure accounting”.
Verus’s revenues for year to 31 December 2005 rose to £36m from previous year’s £29m, yielding an underlying profit of £12m compared to £4m in 2004.
Analysts consider the cost of this acquisition rather high with about 5.1 times Sage’s earnings valuation/sales. But it is worth the cost compared to previous acquisitions as this deal gives them access to a growing market besides expanding its product range.
The New-Castle based company is looking for more acquisitions in Italy, Scandinavia and Middle Eastern countries where it has relatively poor presence. It is also looking to expand its customer base to include the healthcare industry.
Posted
on : Mon, 09 Jan 2006 20:05 GMT | Business News
By : Chris Rowe
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