Sage Group PLC Disposal of North American Payments business (0579H)
June 02 2017 - 9:19AM
UK Regulatory
TIDMSGE
RNS Number : 0579H
Sage Group PLC
02 June 2017
2 June 2017
The Sage Group Plc
Disposal of North American Payments business
Sage announces the sale of its North American Payments business
to GTCR LLC ("GTCR"), a leading private equity firm.
The Sage Group plc ("Sage") today announces that it has reached
a definitive agreement to sell its North American Payments business
("Sage Payment Solutions" or "SPS") a leading provider of bank card
processing, ACH, cheque and gift and loyalty card services in North
America, to GTCR. The divested business will continue to be an
important partner for Sage and a key provider of integrated payment
services to Sage customers.
The enterprise valuation for the transaction is $260m (GBP202m)
of which $240m is payable as cash on completion and the remaining
$20m as deferred consideration(1) . As a partner to SPS, Sage will
continue to receive a revenue share from joint Sage and SPS
customers.
The transaction is subject to certain completion conditions and
is expected to complete in the next 3 months. Proceeds will be used
to reduce net debt and invested in growth.
SPS's reported revenue for the year ended 30 September 2016 was
GBP130m with operating contribution of GBP34m.(2,3)
Stephen Kelly, Sage's CEO commented:
"We recently outlined our updated payments and banking strategy
which included exiting areas of the payments market where the
strategic fit is not as strong as the rest of the business, whilst
continuing to build on our growing network of partnerships within
the payments and banking sector. This strategy will allow us to
enhance and extend our payments capabilities to all our major
geographies, strengthening our golden triangle of accounting,
people & payroll and payments & banking.
Today's announcement to sell the SPS business and partner with
the divested business backed by GTCR reinforces this strategy,
allowing our North American business builders to continue to access
their current payments and banking technology, supported by the
renewed investment from GTCR."
This announcement contains inside information. The person
responsible for arranging for the release of this announcement on
behalf of Sage is Lauren Wholley.
(1) Structured as a senior preferred equity instrument accruing
a pay-in-kind yield. The instrument will be held by Sage until
redeemed by SPS or upon onward sale of SPS to a third party.
(2) Operating contribution excludes expenses for HR, IT and
certain other functions provided by Sage.
(3) The gross assets of SPS at 31 March 2017 were GBP258m.
Enquiries
The Sage Group plc +44 (0) 191 294 3897
Lauren Wholley, Investor Relations Director
Amy Lawson, VP Communications
Derk Bleeker, VP Corporate Development
FTI Consulting +44 (0) 20 3727 1000
Charles Palmer
Dwight Burden
About Sage
Sage is the market and technology leader for integrated
accounting, payroll and payment systems, supporting the ambition of
entrepreneurs and business builders. Today, business builders
measure success in strong relationships, partnerships, and
communities. It's why Sage helps drive today's business builders
with the most intelligent and flexible cloud-enabled software,
support and advice to manage everything from money to people.
Daily, more than 13,000 Sage colleagues in 23 countries work with a
thriving global community of over 3 million entrepreneurs, business
owners, tradespeople, accountants, partners and developers to
champion the success of business builders everywhere. And as a FTSE
100 business, we are passionate about doing business the right way,
supporting our local communities through the Sage Foundation.
Sage - the market and technology leader for integrated
accounting, payroll and payment systems, powered by the cloud and
supporting the ambition of the world's entrepreneurs and business
builders. Because when business builders do well, we all do.
For more information, visit www.sage.com
About GTCR
Founded in 1980, GTCR is a leading private equity firm focused
on investing in growth companies in the Financial Services &
Technology, Healthcare, Technology, Media & Telecommunications
and Growth Business Services industries. The Chicago-based firm
pioneered The Leaders Strategy(TM) - finding and partnering with
management leaders in core domains to identify, acquire and build
market-leading companies through transformational acquisitions and
organic growth. Since its inception, GTCR has invested more than
$12 billion in over 200 companies. For more information, please
visit www.gtcr.com.
Raymond James & Associates Inc is acting as Lead Financial
Advisor to Sage on this transaction. Sage has also received
financial and corporate broking advice from Citigroup Global
Markets Limited.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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