Sage Group, plc plans to sell Sage Nonprofit Solutions to Accel-KKR, a Menlo Park, Calif., based private equity firm. The investment allows Sage Nonprofit Solutions, headquartered in Austin, to focus on implementing new and best-in-class solutions that meet the expanding needs of the nonprofit and government sectors.
The transaction is subject to regulatory approvals and other customary closing conditions. The deal is estimated by officials to be in the $91 million range, depending on market variables. The deal is expected to be complete by the end of this quarter.
“With the acquisition from Accel-KKR, Sage Nonprofit Solutions is now a company dedicated completely to nonprofits and government agencies,” said Krista Endsley, who was appointed the chief executive officer of the new, independent company. “This focus allows us to respond at a higher level to our clients, who have requested improved community and network opportunities as well as expanded services and product offerings that we can now deliver upon.”
This is Accel-KKR’s entrance into the nonprofit technology industry. Endsley said that the renaming and branding process is still weeks away. However, the soon to be formerly Sage products won’t be lonely very long. Endsley said Accel-KKR is looking at the acquisition as a platform.
Growth will be both organic and through acquisition, she said. High on the list are a constituent management system and an entry-level fundraising program. Sage already partners with several tech firms for components it does not have, such as CRM. She declined to indentify specific firms that might be acquisition targets.
Sage Nonprofit Solutions clients will begin to see custom programs including a user conference, expanded customer community with an elevated customer experience and closer connection with mobile applications, she said.
Sage Nonprofit Solutions has been serving nonprofit and governmental organizations throughout North America for more than 30 years. The company has more than 32,000 unique nonprofit organizations as clients. Products include fund accounting, donor and fundraising management, grant management, online donation processing, human resources (HR), payroll and fixed asset management.
Accel-KKR is a technology-focused private equity firm with more than $2.3 billion in assets under management. The firm invests primarily in software and IT-enabled businesses positioned for top-line and bottom-line growth. Accel-KKR tends develop strong partnerships with the management teams of its portfolio companies and focus on building value through significant resources available through the Accel-KKR network.
Talk of a potential spin-off from Sage started this past July when Sage announced a re-dedication to core products. The nonprofit division, while staffed by executives dedicated to the nonprofit space, was always seen as an odd fit for the larger company.
The talks with private equity firms started within the past few months, said Endsley.