Accounting software company Sage announced Tuesday that it will buy payments player Verus.
Sage's acquisition of the company, which specializes in credit card and check payment processing, will cost it about $323.8 million in an all-cash deal.
Verus joins the Sage stable with more than 100,000 small- to medium-size customers (SMEs) in the U.S., including gas stations and car dealerships, and $24.6 million in assets. In the year ended Dec. 31, 2005, Verus made an operating profit of $21 million on revenue of around $63 million.
According to Sage, the acquisition became attractive due to demand for payment processing that can be linked with accounting software, a combination that is expected to save time and boost accuracy.
Sage, which already offers payroll services, will now begin to integrate Verus' products with its own and use the link to cross-sell products. The acquisition also will help bring Sage's offerings in line with those of its U.S. competitors.
Ovum analyst David Bradshaw said the deal is not without risk but may be good for Sage overall.
"On balance, we think that this is a good move for Sage," Bradshaw wrote in a research note. "Software and online services are converging, and the ability to offer a well-supported integrated set of services is potentially very attractive to SMEs.
"And it's no accident that Intuit, Sage's biggest rival, already offers similar services."
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