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SAGE SALE TALKS; NOT LIKELY, BUT

Some have been reading a report from Citigroup analysts, quoted in the publication, Accountancy Age, as stating that Sage might sell its North American operations. I read the statement from the analysts as not saying that at all, but leaving the impression the financial organization thinks Sage’s healthcare business might be on the block. Here's the key statement about Sage North America as a candidate for acquisition.

"Sage has been de-rated as it is widely viewed as ex-growth. We disagree with this assessment. We think inflated US healthcare software valuations offer an opportunity for disposal.” I can't picture the Sage Group disposing of the more than 40 percent of its annual revenue that its North American operations represent. It also would make no sense that a group as frugal as the Sage executives would have let Sue Swenson make the executives hires she has because if they were really thinking sale, they probably would have started thinking that a year ago and simply marked time, and prettied up the company and issued soothing statements. However, spinning out the healthcare group, which has struggled to get going, seems a lot more likely. If I were looking for someone with cash and with a public commitment to growing its healthcare business substantially, I don't think I'd look much further than Intuit. Vendors who want into the midmarket might buy some accounting software, but I can't imagine anyone buying the whole thing, unless the plan was to buy and sell assets. I could imagine Microsoft wanting X-3 and perhaps someone like Infor or SAP wanting Accpac and Accpac Online. But I could always be wrong.

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