Sage Acquires Intacct For $850 Million
July 25, 2017 Mark Hrywna
Sage will expand its cloud financial management footprint in North American with the acquisition of Intacct for $850 million in cash and options. Intacct will be known as Sage Intacct after the transaction is completed, which is expected within weeks subject to customary completion conditions.
The $850 million deal is primarily in cash, with the exception of $43 million in rollover options because employees and the management team have part ownership in the business, Sage Chief Financial Officer Steve Hare said in a conference call with analysts this afternoon. Key members of the executive management team are rolling a minimum of 25 percent of their proceeds into new Sage options, vesting in 12 months assuming continued employment, in addition to other retention incentives.
“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,” Sage CEO Stephen Kelly said in a press release. “Intacct opens up huge opportunities in the North American market, representing over half of our total addressable market,” he said.
The Sage Group plc is a British multinational enterprise software company headquartered in Newcastle, United Kingdom, with Sage U.S. headquarters in Atlanta, Ga. San Jose, Calif.-based Intacct is a cloud-based financial software company that was founded in 1999. It provides cloud financial management targeted at growing businesses looking for financial and operational insight, process automation, integration with existing software, advanced features and a modern user experience.
Intacct CEO Robert Reid will remain to run the business. “We are excited to become part of Sage because we are relentlessly focused on the same goal – to deliver the most innovative cloud solutions for our customers,” Reid said. “Intacct is growing rapidly in our market and we are proud to be a recognized customer satisfaction leader across midsize, large and global enterprise businesses. By combining our strengths with those of Sage, we can jointly accelerate success for our customers,” he said.
Intacct has reported revenue of $88 million for the 12 months ending in June, more than 90 percent of which is subscription based, and current annualized recurring revenues of $96 million. Revenue for the year ending June 2016 was $67 million, with loss before tax of $23 million and gross assets of $36 million.
Sage said it expects Intacct and previous acquisitions Sage People, formerly Fairsail, and Compass to add about $26 million of revenue in this financial year. Sage trades under the symbol SGE on the London Stock Exchange and closed at $700.50 today, up 1.82 percent.
Sage Nonprofits Solutions was acquired by private equity firm Accel-KKRx in 2013 for $101.2 million and later rebranded as Abila. Accel has since sold a majority stake in Abila to Insight Venture Partners, which brought it together with .YourMembership and Aptify under the umbrella of Community Brands.