Disposal of US Payroll outsourcing business

RNS Number : 1624N

Sage Group PLC

15 January 2019

 

Disposal of US Payroll outsourcing business

15 January 2019

In its full year results announcement on 21 November 2018, Sage announced that it was holding Sage Payroll Solutions ("SPR"), the US-based payroll outsourcing business, for sale. Sage has now entered into an agreement for the sale of SPR to iSolved HCM, LLC ("iSolved"). iSolved is a portfolio company of Accel-KKR and a provider of human capital management solutions.

This divestiture is part of Sage's strategy, as set out in the November 2018 results, to focus on subscription software solutions that are in or have a pathway to the Sage Business Cloud.

As disclosed at the FY18 results announcement, SPR had revenue of £38m and operating loss of £1m for the year ended 30 September 2018. The total sale consideration is approximately £78m, of which £73m is payable in cash on completion (subject to a customary debt and working capital adjustment) and the remaining £5m represents contingent consideration. Sage expects to report a statutory profit on disposal of approximately £23m on completion.

The transaction is subject to certain completion conditions, including clearance (or deemed clearance upon expiration of the applicable waiting period) under the US Hart-Scott-Rodino Antitrust Improvements Act. Completion is expected to occur within the next three months. Proceeds will be invested for growth and used to reduce net debt.

Enquiries

The Sage Group plc [phone]

Lauren Wholley, Investor Relations Director

Amy Lawson, EVP Communications

Derk Bleeker, EVP Corporate Development

FTI Consulting [phone]

Charles Palmer

Dwight Burden

 

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