Accounting and productivity software vendor Sage, which employs more than 220 people in Ireland, has acquired US firm Verus Financial Management for £185m sterling in cash. The acquisition is expected to be complete within the coming month, subject to regulatory approvals.
Verus is a leading provider of merchant services in North America. Merchant services support retail, business-to-business and e-commerce businesses in processing customer transactions through credit cards, debit cards and cheques. Verus has a customer base of 101,000 small and medium-sized merchants in the US, including speciality retailers, petrol stations, restaurants, property managers and motor dealerships. Verus revenues come from services fees linked to processed sales transactions.
Payment processing services are becoming an increasingly important business process requirement for US SMEs, not only in managing payments to their employees through payroll services, but also in managing transactions with customers through merchant services such as those provided by Verus.
The market for merchant services is growing strongly, underpinned by growth in the US retail sector, wider adoption of e-commerce by customers and increased use of credit and debit cards. Verus will form the core of Sage’s North American Merchant Services Division, complementing Sage’s existing North American Payroll Services.
Within the Sage customer base, trials have shown a clear demand for linking payment processing services with accounting software, so that dual data entry is eliminated and data quality is ensured. To realise this additional long-term revenue opportunity, Sage will enhance the value of Verus services by integrating them with Sage accounting software.
Paul Walker, Sage’s chief executive, commented: “Acquiring Verus expands our business management solutions into a new and growing market, where SMEs are showing clear demand for more automation of their business processes.
“For our existing customers, Verus will provide merchant payment services that can be linked to their existing Sage accounting software. For new customers, these new payment services, in addition to our payroll services and customer relationship management products, further broaden the appeal of Sage solutions beyond pure accounting,” Walker said.
By John Kennedy