Europe

Sage Considering Sale Of North American Business Unit

Britain's largest software group by sales, Sage, is looking for a buyer for its North American payments business as part of a turnaround strategy. Sage specializes in accounting and payroll software for clients in more than 20 countries.

In a brief statement last week, Sage confirmed it was “evaluating potential strategic options for its North American payments business, including a sale.”

“There can be no certainty that this evaluation will lead to any transaction,” the group added.

Sage, despite being the largest firm of its kind in the U.K., has faced difficulties in its core business line of installing software in customers’ offices as it fends off competitors who run their software through the web or cloud. Sage, in an attempt to keep up with the changing market, is looking to add new, technology-driven products as it attempts to hit the reset button and boost its growth. The plan includes an aggressive push to encourage customers to sign up to a subscription-based service.

Sage reported improved revenue growth and operating margins for the 12 months to the end of September as of last month, as subscriptions are starting to pick up and offset the decline in traditional software sales.  But that growth apparently did not extend to North America — Sage conformed that the region was “underperforming relative to Sage’s overall performance,” remaining flat year on year.

All in all, Sage's reported revenue growth over the year that ended in September was 7 percent in Europe vs 4 percent in North America.

Sage’s North American business generated about one-third of its organic revenues during the year.

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