Member Article

Sage to acquire U.S. payroll provider in £96.9 million deal

Newcastle-based Sage Group plc has announced a £96.9 million agreement, subject to customary closing conditions, to acquire U.S.-based provider of payroll and HR services, PAI Group Inc (PayChoice).

The deal for the provider, whose services target U.S. small and medium based businesses (SMBs), is expected to be completed in October 2014.

The move is an attractive fit for Sage as it strengthens their presence in the growing U.S. payroll market.

PayChoice, who have 16 offices across the U.S. employing 260 staff, is a profitable business with a high proportion of recurring subscription revenue.

The acquisition accelerates Sage’s move to the Cloud in this market by leveraging PayChoice’s Software as a Service (“SaaS”) platform.

PayChoice’s product portfolio provides easy to use online payroll solutions to SMBs and strengthens the Sage value proposition to customers with a more robust and comprehensive offering.

The combined portfolio provides attractive growth opportunities, particularly through new customer acquisition and cross-sell to the combined customer base.

CEO of Sage North America, Pascal Houillon, said: “PayChoice is an excellent business, with a strong management team, attractive cloud platform and a proven business model based on supporting the needs of small and medium-sized businesses and licensees.

“We are excited about the growth opportunity that the combination of Sage and PayChoice creates in this market and delighted to welcome the management and staff of PayChoice to Sage.”

CEO of PayChoice, Robert Digby, said: “PayChoice is thrilled to become a part of Sage.

“We already share so many synergies: our heritage of supporting SMBs, our culture, our emphasis on customer experience, and our focus on accountants and financial institutions.

“This is a great move for our company and we see nothing but tremendous opportunity in the future.”

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