Group Press Releases
Acquisition of UK Merchant Services Provider
13 November 2006
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. “
The Sage Group plc +44 (0) 191 294 3068
Paul Walker, Chief Executive
Paul Harrison, Finance Director
Cynthia Alers, Investor Relations
Tulchan Communications +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.