Sage Valued Verus Highly

Accounting Technology, June, 2006

The potential that Sage sees in this year's acquisition of Verus Financial Management is shown by the purchase price: Sage paid $325 million for Verus, which had about $64 million in revenue for 2005. What the price got Sage was a customer base of 101,000 small and mid-sized merchants. The purchase price was more than five times Verus' annual revenue.

The acquisition of software companies rarely hits two times revenue under the best circumstances. When Sage purchased Federal Liaison Services, a tax payment processing company, in 2004, it paid just under two times revenue. Sage reportedly balked at paying just under four times revenue for another financial software company a few years ago. The 2005 Verus revenue was an increase of 26 percent over fiscal 2004's $51 million....

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