UK accounting software outfit Sage today said it had agreed to acquire the remaining stake in Brightpearl, providers of cloud-based retail software, for $299m (£225m).
Sage already owns 17 per cent of the e-commerce software specialist but is set to acquire the remaining 83 per cent, funded from Sage's existing cash and available liquidity.
Sage claimed the move will bring growth by targeting mid-sized businesses. It hopes the combination of Sage's cloud-based accounting software Intacct and Brightpearl will be taken up by retailers and wholesalers looking for an integrated approach to financial management, inventory planning, sales order management, purchasing and supplier management, CRM, fulfilment, warehousing, and logistics management.
For the year ending December 2021, Brightpearl is expected to generate revenues of $27m (£20m), up 50 per cent on a year earlier, while more or less breaking even in terms of profit. The merger is subject to regulatory approval in the US.
In a pre-canned statement, Sage CEO Steve Hare said: "Together, Sage and Brightpearl will remove the barriers that hold back retailers and wholesalers, streamlining their systems and enabling them to focus on growth."
In full-year results released in November, Sage posted total revenue of £1.78bn, up around 3 per cent on a year earlier, and an operating profit of £343m. Sage Business Cloud was growing 19 per cent annually, the company said.
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Although it may be chugging along nicely, investors in Sage may eye rivals' growth jealously. Workday, which also makes cloud-based financial software, saw a 20 per cent increase in revenue in its third quarter. Meanwhile, Unit4 saw cloud subscription revenue increase 27 per cent in its most recent numbers.
In May last year, Sage decided to sell off its Brazilian operation to local management. At the time it said the divestiture was "part of Sage's strategy to focus on subscription software solutions that are in or have a pathway to the Sage Business Cloud."
In June last year, customers of Sage Drive experienced three days of underperforming service. At one point, Sage was forced to briefly yank the whole thing offline to deal with the mysterious underlying condition that was causing the borkage.
Sage is the UK's second-largest technology company and dates back to 1981. In its early days, it produced software for the Amstrad PCW word processor which used the CP/M operating system. ®