TMCnet News

Sage makes record cash bid for Norwegian rival
[March 23, 2006]

Sage makes record cash bid for Norwegian rival


(The Birmingham Post Via Thomson Dialog NewsEdge)Accounting software company Sage has made an offer featuring its biggest ever cash outlay for a Norwegian counterpart.

Sage plans to buy Visma for pounds 349 million in a recommended deal, but the move could flush out other bids.

Analysts said the purchase was not in the bag yet. Visma, with 200,000 customers is the largest Scandinavian vendor of business management software for SMEs.

Sage, whose software is used by around 4.7 million users across the world, will pay an agreed 125 crowns per share, an 18 per cent premium to Visma's closing price on Tuesday.

Chief executive Paul Walker said: "The proposed acquisition of Visma is consistent with the Sage strategy of expanding geographically. Sage doesn't really have any presence in these markets today. We see this as very complementary to our business."



Visma made an operating profit before depreciation and amortisation equal to pounds 22 million in 2005 on revenues of pounds 166 million.

Sage has a reputation as a consolidator in the industry. It bought some six companies for pounds 101 million in the last financial year and started the new year with a deal to acquire French business management software firm Adonix for pounds 78.4 million.


In January it shelled out cash and assumed debt totalling pounds 184 million for US payment-processing company Verus Financial Management from privately owned Financial Technology Ventures and other shareholders.

Visma chairman Svein Ramsay Goli said the price was fair but not amazing and he saw no problems with gaining approval from competition authorities.

"This is a fair price. In the long term it's less certain whether it's good, because the firm has developed very well recently," he said. "There have long been rumours that Sage was interested, but there has never been a concrete bid."

Visma chief executive Oystein Moan said: "To a large extent Visma supplements Sage and there is very limited overlap in the two companies' market positions."

Hallgeir Hollup, an analyst at Danske Equities, said he could not rule out rival bids. "It's an OK premium, but it could go higher if there is a round of bids."

[ Back To TMCnet.com's Homepage ]