Sage Group Buys Intacct
Sage Group, the British enterprise giant, announced that it has bought a cloud-based financial firm called Intacct for $850 million. This money will be paid in the form of cash and stock optionsand the deal is expected to be closed by next month. After the acquisition is completed, it will be known as Sage Intacct and the current management will continue to run the operations. In fact, there are no plans to cut any staff at Intacct, so it will be business as usual there.
This is the largest ever acquisition deal for Sage Group till date . Intacct is a financial firm that specializes in providing cloud-based insights into the finances and operations of company to help them have a better financial management. It has thousands of customers in North America, ranging from startups to large business houses and this wide customer base comes both directly and through its network of partners.
Currently, there are about 450 employees in Intacct, out of which 250 are in its headquarters in San Jose. This company’s annual revenue grew by 33 percent over the last three years and is expected to touch about $96 million this year. It has raised around $131 million since it was founded in 1999. In 2014, the company had its latest round of funding and at that time, it was valued at $211 million.
Such a fast growing company is probably what the Sage Group was hunting for, to further its North American ambitions.
To give you a brief background, Sage was founded by David Goldman, Paul Muller and Graham Wylie in 1981 in the city of Newcastle upon Tyne. It began as a company that creates accounting software for small businesses and the first software came to the market in 1984. Since the 1990s, it started making a stream of acquisitions to become the third largest supplier of enterprise resource planning software for small business. Only Oracle and SAP are ahead in terms of revenue and market share.
Given this background, Sage wants to rapidly expand into the North American market because of the huge potential it offers. Already, Sage has a good presence in the U.S with its headquarters in America and is well-poised to surge forward.
This deal presents a win-win situation for both companies. From Intacct’s perspective, it means access to more opportunities and funding. In fact, an analyst at Bessemer Ventures Partner opined that Intacct is in a position to go public, but instead chose to be a part of a larger group like Sage because of the financial flexibility and potential benefits that can come from it.
For Sage too, this is a great deal as Intacct can be its launchpad for accelerating its presence in North America.