AN YATES INVESTEC
We see the Folhamatic deal as a sensible strategic move and it seems more will follow. The valuation is rich, but reflects exposure to businesses with critical mass and recurring revenues in emerging markets. This deal is reminiscent of the old Sage tried and tested M&A model which worked well until Emdeon.
GARETH EVANS CANACCORD GENUITY
This deal is interesting – in some ways it is a return to the good old days of Sage’s acquisitive growth. In others, it is quite different – paying a reasonably full price for a business already operating at very strong Ebitda margins ... Sage is buying a smaller lookalike, which should generate revenue growth.
WILL WALLIS NUMIS
As a cash deal it is unsurprisingly earnings-enhancing, although not as earnings enhancing as buying back shares would be. Overall, Sage is paying up for growth. Recent weakness in the shares means we move up to Add on an unchanged 300p target price.