Friday, 13 July 2007

Sage to buy Cegid?

A report on the FT's MergerMarket service today Click here suggests that Sage could be in the running to buy French software house Cegid. However, the report also suggests that PE houses were also likely bidders. Indeed H&F, which has recently bought the 'consolidated' Iris and CSG (see below) is mentioned in the article.

Currently Cegid shares trades at E45 valuing the group at E395m. The FT report suggests at an offer price of "E55 or higher" is required - putting the value nearer E500m. That is well within Sage's range (indeed well within the range to avoid Holway's dreaded 'acquisition Indigestion'!) and Sage has made France a target area of expansion. Indeed Cegid seems an excellent fit with Sage. Cegid concentrates on business software for SMEs in particular verticals like chartered accountants and auditors, fashion, industry, retailers, hotel and restaurant management, distributors, public works and civil engineering, and hygiene. It has standard software in payroll, HR, sales admin - like Sage. Sage already has some experience of acquisitions in France having bought Adonix and Cogestib in 2005 - although these were pretty small. Cegid would add around E250m revenue.

Looks like Cegid would prefer a "trade buyer". To me Sage seems the most natural of homes.

No comments: