Although its small business customer base is well catered for in terms of HR, personnel, and payroll-management software, the company did not have much to offer in the mid-market area. Snowdrop, which targets UK businesses with between 50 and 2,000 employees, is designed to fill that mid-market gap.
Our customers have been indicating for some time a strong interest in automating and managing more effectively their HR activities. The acquisition of Snowdrop, with its specialist range of HR software products backed up by first class service and support, will enable us to provide our customers with exactly what they require in the HR field, said Paul Stobart, chief executive of Sage UK and Ireland.
Although it is not a large company, Snowdrop will also bring another 700 customers into the Sage business, including Pret A Manger, Ofcom, and Wates Group. In fiscal 2006 it reported revenue of 7.5m pounds ($14.9m), a 35% improvement over its previous year, and EBITA of 1.1m pounds ($2.2m).
Sage has an ongoing strategy of acquiring either to add technology and functionality or to move into new markets, and this acquisition falls into the former category. However, it is also in the process of transforming the company and moving to a world of broad-based integrated business suites in place of its current portfolio of disparate applications. This raises the question of how it is going to deal with purchases like this in terms of either integrating them or taking the best features for use in its planned mid-market suite.
