23 December 2003 Mid-market enterprise software supplier Sage has agreed a $110 million cash deal to buy Computer Associates’ (CA) 90% stake in accounting subsidiary ACCPAC.
The deal is expected to be closed before the end of February.
CA CEO Sanjay Kumar said that deal reflected the company’s decision to quit the business applications market and to focus on systems and storage management software instead.
CA had tried for a number of years to spin off Pleasanton, California-based ACCPAC without success. It had twice registered the company for an initial public offering (IPO), but both had to be pulled because of a lack of investor interest, the latest in early 2003.
A trade sale of the unit had been under negotiation since the summer.
ACCPAC has about 540,000 customers supported by 7,000 channel partners worldwide. It supplies accounting, customer relationship management (CRM), human resources, warehouse management, manufacturing, electronic data interchange (EDI) and retail software for small and medium-sized businesses.
In the year to the end of March 2002, ACCPAC achieved a net loss of $10.6 million on revenues of $78.3 million. In the first nine months of fiscal 2003 — the latest accounts available — the company eked out a profit of $2.6 million on revenues of $62.6 million.
Sage said that the deal will help it better penetrate the Australian and South African markets, as well as provide it with an entry point into Asia/Pacific.
Sage has grown through acquisition from being a supplier of accounting software for small businesses in the 1980s to the UK’s second biggest software company after Misys and one of the largest in Europe.