Sage is to acquire cloud-based financial software company Intacct for $850m.
The deal, which is the largest the company has ever made, will be funded by cash and stock transaction.
The idea behind the move to buy the 19-year old accounting software company, appears to be to expand on Sage’s existing cloud financial management offerings and marks the third start-up Sage has acquired this year, following on from Compass, and Fairsail.
Read more: Human capital firm Fairsail, a UK software success story
“Today we take another major step forward in delivering our strategy and we are thrilled to welcome Intacct into the Sage family. The acquisition of Intacct supports our ambitions for accelerating growth by winning new customers at scale and builds on our other cloud-first acquisitions, strengthening the Sage Business Cloud. Intacct opens up huge opportunities in the North American market, representing over half of our total addressable market,” said Stephen Kelly, CEO of Sage.
Innact, which competes with the likes of FinancialForce and Oracle’s NetSuite in the ERP space, said that the company has around 11,000 customers and that it ended the
fiscal year in June 2016 with revenue standing at $67m, but with pre-tax losses of $23m.
Fred Studer, CMO, FinancialForce said that the acquisition by Sage of Intacct presents an opportunity for the ERP company.
Studer said: “Sage’s acquisition of Intacct creates a tremendous opportunity for FinancialForce. Not only does this validate market interest in and business value of cloud ERP, it gives us the edge in delivering our differentiated value to new prospects during this time of uncertainty for Sage and Intacct customers.
Read more: Sage sells US payments business for £202m
“Unlike Sage’s multi-platform, multi-cloud, integration-dependent offering, FinancialForce has been native on Salesforce Platform since our founding. Our cloud ERP solution is built for the new services economy, with fully integrated Professional Services Automation (PSA), Financials, Billing and CRM capabilities to help businesses exceed customer expectations, from opportunity to renewal, on one single platform.”
Initial reaction to the to the deal from the stock market has seen shares in Sage drop by more than 4%, although at time of writing the company’s stock price has dropped by 1.76%.
