Sage acquires UK Merchant Services Provider

13 November 2006

Acquisition of UK Merchant Services Provider

                                                                               
Sage acquires UK Merchant Services Provider, Protx, for a consideration of £20 
                                    million                                    

The Sage Group ("Sage"), a leading international supplier of business
management software solutions, announces the acquisition of Protx Group Ltd
("Protx") from its shareholders for £20 million, paid in cash. Protx
specialises in providing secure, online payment services for small and medium
businesses ("SMEs") in the UK.


Protx, which was established in 2001, is a leading independent on-line payment
service provider to SMEs in the UK, with a customer base of over 10,000
businesses. The company has gained approval from all major banks to facilitate
secure on-line transactions, including Lloyds TSB Cardnet, Bank of Scotland,
Barclays Merchant Services, HSBC, Natwest Streamline, American Express, Diners
Card, JCB and Euroconex.

Protx offers a cost-effective service for SME merchants, a market that is not
well serviced by the larger payment processing companies. It operates in an
expanding and highly fragmented market where internet retail sales are forecast
to grow at 35% per annum. Over the last year, the business added new customers
at a net rate of 350 per month. Revenues are generated from services fees on
processed sales transactions over the internet. For the full year ended 31
March 2006, revenue was £1.9 million (2005: £967,000), an increase of 97%.
EBITDA was a loss of £20,000 (2005: loss of £537,000). Revenues for the six
months to 30 September 2006 were £1.5 million and EBITDA profit of £264,000
(unaudited), demonstrating the improving profitability and high growth trend of
the company.
 

Payment processing services support retail, business to business and e-commerce
businesses in processing customer transactions through credit cards, debit
cards and cheques. When Sage acquired Verus in the US earlier this year, it was
clear that SMEs are increasingly using e-commerce to promote their businesses
and there is a growing demand for secure payment processing services, coupled
with high levels of support.

The acquisition of Protx is an important step in fulfilling Sage's vision to
provide a broader business solution for SMEs, which will eventually enable them
to link and integrate merchant services with back-office accounting, stock
control and CRM applications.

Paul Walker, Chief Executive of The Sage Group, commented;

"The acquisition of Protx brings Sage the capability to integrate secure
payment systems with our business management software. With Protx in the UK and
Verus in the US, we continue our strategy to expand into new adjacent markets
and broaden the range of services we can offer our SME customers. "


Enquiries:    The Sage Group plc                     Tulchan Communications
              Paul Walker, Chief Executive,          Julie Foster,
              Paul Harrison, Finance Director        Kirstie Hamilton
              Cynthia Alers, Investor Relations

              Tel: [phone]             Tel: + 44 (0) 20 7353 4200

Notes to editors: The Sage Group plc is a leading international supplier of
business management software solutions and related products and services,
principally 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
12,000 people worldwide.