The Sage Group has paid 30m pounds ($61m) for a majority interest in XRT, a supplier of treasury and payment management software operating out of France. The move is the first part of what is expected to become a full acquisition.
The cash payment secures about 70% of the shares in the public company, which is listed on Euronext Paris. French listing regulations stipulate that having acquired 70% of the share capital, Sage must then make an offer to acquire the remaining outstanding shares from shareholders. It is paying 1.67 euros ($2.31) per share for its 70% stake, which is expected to complete within the next few days.
In the year ended December 31, 2006, XRT’s revenues were $45.1m. It has a customer base of 6000.
XRT targets the mid-market space, supplying treasury management and payment software to organizations in France, Spain, Portugal, Italy, and Latin America. The software is designed to enable organizations to centralize cash flow information, streamline business processes, and automate financial communication with banking and business partners. Used in conjunction with ERP systems, it enables end-to-end straight-through processing and electronic payments.
Sage chief executive Paul Walker said: The acquisition of XRT is a further development of our range of specialized business management software. XRT’s advanced mid-market solutions for the cash management sector build on our existing Concept business, acquired in 2003, and complement our leading business management software for the SME industry.
The Concept business is based on the acquisition of the French company Concept Group which provided treasury, cash management, and financial consolidation software to SMBs, mostly in France.
Sage has been steadily ramping up its treasury management and payment services capabilities. Recent acquisitions in the payment processing area include UK-based Protx, and Verus in the US.
The acquisitions are all part of its strategic plan to expand its business software footprint, move into adjacent markets, and broaden its range of software. One of its aims is to provide software to enable SMBs to integrate merchant, payment, and now treasury management services with accounting and other back-office applications. The company believes that while large companies are well served in these areas, there is little on offer for SMBs.