Acquisition

9 January 2006

Sage acquires US merchant services provider, Verus

The Sage Group plc ('Sage') has agreed to acquire Verus Financial Management,
Inc. ('Verus') from Financial Technology Ventures and its other shareholders,
for an enterprise value of approximately £184 million, to be paid in cash.
Verus is a merchant services business specialising in credit card and cheque
processing for small and medium-sized businesses ('SMEs') based in the US in
Nashville, Tennessee. The acquisition is expected to complete within the next
month, subject to regulatory approvals.

Verus is a leading provider of merchant services in North America. Merchant
services support retail, business to business and e-commerce businesses in
processing customer transactions through credit cards, debit cards and cheques.
Verus has a customer base of 101,000 small and medium-sized merchants in the
US, including speciality retailers, petrol stations, restaurants, property
managers and motor dealerships. Verus revenues come from services fees linked
to processed sales transactions.

Payment processing services are becoming an increasingly important business
process requirement for North American SMEs, not only in managing payments to
employees through payroll services, but also in managing transactions with
customers through merchant services such as those provided by Verus. The market
for merchant services is growing strongly, underpinned by growth in the US
retail sector, wider adoption of e-commerce by customers and increased use of
credit and debit cards. Verus will form the core of Sage's North American
Merchant Services Division, complementing Sage's existing North American
Payroll Services.

Verus has grown rapidly organically, following a series of acquisitions in 2002
and 2003. Revenue for the year ended 31 December 2005 was approximately £36
million* (2004: £29m*), representing growth of approximately 26% on the prior
year. Operating profit before depreciation and amortisation was approximately £
12 million* (2004: £4m*), having grown strongly during the year as a result of
the significant revenue growth and a consistent operating cost base. At 31
December 2005, Verus had gross assets of approximately £14 million*.

Verus services include point of sale transaction processing and customer
validity checks. This process includes a validation on each transaction's risk
so that individual sales can be queried if appearing unusual. To complete each
transaction, Verus transfers cash directly from the card- or cheque-issuing
bank to the merchant's bank. The merchant also receives statements and
analysis, which can be used as inputs to accounting software.

Within the Sage customer base, trials have shown a clear demand for linking
payment processing services with accounting software, so that dual data entry
is eliminated and data quality is ensured. To realise this additional long-term
revenue opportunity, Sage will enhance the value of Verus services by
integrating them with Sage accounting software.

Paul Walker, Sage Chief Executive, commented, 'Acquiring Verus expands our
business management solutions into a new and growing market, where SMEs are
showing clear demand for more automation of their business processes. For our
existing customers, Verus will provide merchant payment services that can be
linked to their existing Sage accounting software. For new customers, these new
payment services, in addition to our payroll services and customer relationship
management products, further broaden the appeal of Sage solutions beyond pure
accounting'.

*All financial information calculated on the basis of £1 = $1.77. 2005 figures
are unaudited.

A conference call to discuss this announcement will be held at 9.30am today.
The dial-in number is [phone]. Presentation material, to be referred
to during the call, will be available at www.sage.com/investors/verus from 9:
15am.

Enquiries

The Sage Group plc [phone]

Paul Walker, Chief Executive

Paul Harrison, Finance Director

Phil Branston, Investor Relations

Tulchan [phone]

Julie Foster, Kirstie Hamilton

Notes to editors

The Sage Group plc is a leading international supplier of accounting and
business management software solutions and related products and services for
small to medium-sized enterprises. Formed in 1981, Sage was floated on the
London Stock Exchange in 1989 and the Group now employs over 10,000 people
worldwide.