Sage goes for a Brazilian

published 20 June 2012

Accountancy software behemoth Sage Group has acquired a controlling interest in Folhamatic Group, a provider of accounting, tax and payroll and regulatory content software in Brazil.

The UK company is paying £125m for a 75% stake in the company, equating to an enterprise value for 100% of the business, including estimated net debt, of £191m.

The price values Folhamatic at 13.4 times projected 2012 earnings before interest, tax, depreciation and amortisation, and is expected to immediately enhance Sage's earnings. Return on capital is expected to meet Sage's risk-adjusted hurdle rate in the third year after the acquisition.

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Folhamatic has a leading market position in a large and growing economy, and its business is highly complementary to Sage's strategy and business model, Sage's statement said.

"We are particularly pleased that Mauricio Frizzarin [founder and boss of Folhamatic] will continue to run the Folhamatic business, which builds on our track record of retaining the top entrepreneurial talent of businesses we acquire to drive value for our shareholders," said Guy Berruyer, Chief Executive Officer of Sage.

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