Sage to sell North American payments business

Software company Sage has agreed to sell its North American payments business - Sage Payments Solutions - to private equity firm GTCR for an enterprise value of $260m (£202m).

Sage said $240m is payable as cash on completion, with the remaining $20m as a deferred consideration. As a partner to SPS, Sage will continue to receive a revenue share from joint Sage and SPS customers. Proceeds from the deal, which is expected to complete in the next three months, will be used to reduce net debt and invest in growth.

For the year to the end of September 2016, SPS's reported revenue was £130m, with operating contribution of £34m.

Chief executive officer Stephen Kelly said: "We recently outlined our updated payments and banking strategy which included exiting areas of the payments market where the strategic fit is not as strong as the rest of the business, whilst continuing to build on our growing network of partnerships within the payments and banking sector. This strategy will allow us to enhance and extend our payments capabilities to all our major geographies, strengthening our golden triangle of accounting, people & payroll and payments & banking.

“Today's announcement to sell the SPS business and partner with the divested business backed by GTCR reinforces this strategy, allowing our North American business builders to continue to access their current payments and banking technology, supported by the renewed investment from GTCR."

At 1535 BST, the shares were up 0.5% to 732p.