UK accounting software biz Sage is flogging its payments arm to US firm Elavon for £230m, the latest asset offload of its "non-core" businesses in favour of those with a cloudier flavour.
Sage Pay processes payments on behalf of the company's small business customers. But it contributed just £41m in revenue for the full year ended September 2018 and operating profit of £15m.
Overall group revenue last year rose 6.8 per cent £1.84bn, while operating profit rose 22.7 per cent to £427m. The Sage Business Cloud sold £377m worth of services in fiscal 2018, up 61 per cent on the prior year, and its Cloud Connected business was £233m, up 82 per cent.
The deal is expected to be completed by the second quarter of 2020, while it expects to report a statutory profit of £180m on completion.
Sage also sold its North American payments segment in June 2017 to Chicago-based private equity firm GTCR for $260m (£202m) and its payroll outsourcing business in January 2019.
Jon C Davies, analyst at TechMarketView, said: "Sage has been reviewing its portfolio of services for a while, as part of its cloud acceleration plan. The company has been shedding assets deemed to be non-core and sold off its payments business in the US in 2017. A sale of the Sage payroll business in the US also followed at the start of 2019."
Megabuyte analyst Patrick Stewart agreed: "Sage's current strategy is focused on its subscription software solutions and particularly on the growth of its Business Cloud platform. As such, Sage Pay was deemed a non-core asset with payments and banking services preferred to be delivered through a network of partnerships."
Sage CEO Steve Hare said: "Our vision of becoming a great SaaS company for customers and colleagues alike means we will continue to focus on serving small and medium sized customers with subscription software solutions for Accounting & Financials and People & Payroll.
"Payments and banking services remain an integral part of Sage's value proposition and we will deliver them through our growing network of partnerships, including Elavon."
Elavon is active in 10 countries and claims to be the fourth-largest merchant acquirer in Europe, competing against the likes of Global Payments, Vantiv, FIS, Ingenico, Verifone, Stripe, Chase, MasterCard and Visa.
Hannah Fitzsimons, president and general manager of Elavon Merchant Services in Europe, said: "This acquisition brings tremendous talent and leading technology to Elavon, which can be leveraged across the European market."
The firm is expected to publish its full-year financial results this month. ®