NEWS
Accounting software company Sage has announced it is to buy payments player Verus.
Sage's acquisition of the company, which specialises in credit card and cheque payment processing, will cost it £184m in an all-cash deal.
Verus joins the Sage stable with more than 100,000 SME customers in the US, including petrol stations and car dealerships, and £14m in assets. In the year ended 31 December 2005, Verus made an operating profit of £12m on revenue of around £36m.
According to Sage, the acquisition became attractive due to demand for payment processing to link with accounting software to save time and boost accuracy by cutting double entry.
Sage will now begin to integrate Verus' products with its own and use the link to cross-sell products. The acquisition will also serve to bring Sage's offerings in line with its US competitors.
Ovum analyst David Bradshaw said the deal is not without risk but may be good for Sage overall.
He wrote in a research note: "On balance, we think that this is a good move for Sage. Software and online services are converging, and the ability to offer a well-supported integrated set of services [Sage already offers payroll] is potentially very attractive to SMEs."And it's no accident that Intuit, Sage's biggest rival, already offers similar services."
