Sage, the UK-based accountancy software firm, is boosting its presence in the US market with a $145 million (#88 million) takeover of Peachtree Software.
Peachtree, based in Atlanta, Georgia, sells accountancy software to small businesses, and has over one million registered users. It made operating profit last year of $5.97 million, on turnover of $52.5 million.
?Peachtree provides us with a strong presence in the entry level US accounting software market complementing the position we already occupy with our existing business in the US, which markets its products and services to somewhat larger companies,? chief executive of Sage, Paul Walker, said in a statement.
Sage said it believed the deal would give it access to a significant customer base in the US and enable it to increase the revenues Peachtree currently earns from support services. While around a third of Sage?s existing customer base have support contracts, only 3.6 per cent of Peachtree?s customers have.
Analysts said the deal is a good fit for Sage, tying in well with its other US acquisition, State of the Art, another accountancy software firm which it purchased in March 1998 for #220 million.
The acquisition is cash, part funded by a placing of Sage shares with investment bank BT Alex Brown International, placing 3.49 million new shares at not less than #18.45 a share.
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