Sage to sell US payroll outsourcing business for £78m

FTSE 250 software company Sage has agreed to sell its US-based payroll outsourcing business, Sage Payroll Solutions,(SPR) to iSolved for around £78m.

Sage, which had announced back in September that it was putting the business up for sale, said this was part of its strategy to focus on subscription software solutions that are in or have a pathway to the Sage Business Cloud.

Of the total consideration for the sale, £73m is payable in cash on completion and the remaining £5m represents contingent consideration. Sage said it expects to report a statutory profit on disposal of approximately £23m on completion.

The deal is expected to complete within the next three months, with proceeds invested for growth and used to reduce net debt.

iSolved is a portfolio company of Accel-KKR and a provider of human capital management solutions.

At 1520 GMT, the shares were up 1.5% to 600.80p.