Sage(LSE:SGE) Acquires Intacct

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Sage(LSE:SGE) Acquires Intacct

Sunil Grover, Managing Partner
sgrover@truebluepartners.com
(669) 231-8770

Deal Financials

Total consideration: $850m ($807m cash, $43m stock options)
Intacct LTM revenues in 2016 and 2017 of $67m and $88m respectively

Transaction Overview

  • On July 25th, 2017, the Sage Group, the world’s third-largest ERP software provider, announced their acquisition of Intacct Corp for a total consideration of $850 million in cash.
  • Sage serves 6.1 million customers worldwide through their Accounting, Payroll and HCM, and Payments software.
  • Intacct serves small to mid-sized customers with industry-leading, cloud-based accounting software, competing directly with Intuit’s Quickbooks.
  • Sage now boasts the “the first and last cloud financial management solution a customer will ever need from start-up to enterprise” through this bolt-on acquisition.

Markets are Willing to Pay a Premium for Top Performing Assets

  • Intacct sports a highly impressive business profile that helped to create a premium valuation.
    • Cloud SaaS revenues and offerings
    • Strong 33% revenue growth rate on a trajectory to reaching $100m
  • Buyers and investors tend to view the $100m revenue mark, coupled with a strong growth rate, as a sign of market dominance; at this point valuation multiples inflate significantly.

Sage is Expanding its Suite of SMB Offerings

  • Sage’s willingness to purchase Intacct at a 9.7x revenue multiple indicates the intense pressure the company faces to compete with cloud-based rivals for US customers.
  • Recent acquisitions in the HR and Accounting segments allow Sage to provide a complete set of enterprise solutions, as opposed to single segment solutions currently provided by most mid-market providers.

About True Blue Partners, LLC
True Blue Partners is a M&A advisory firm that serves lower mid-market enterprise software and service companies. For more information please visit www.truebluepartners.com or email us at info@truebluepartners.com