SAGE has agreed to sell its healthcare business to Vista Equity Partners for $320m (£207m).
The software firm says it will return all of the proceeds to shareholders through a buyback scheme, adding that the move will enable it to focus on its core US customer base.
It said yesterday it had reached a definitive agreement to sell the subsidiary, which is used by US GP practices. It expects the sale to be completed in November.
Chief executive Guy Berruyer said: “The sale of Sage Healthcare allows management in the North American region to focus on the considerable opportunities that exist within our core US customer base.
“We are also announcing a share buyback programme with the proceeds of the sale, reflecting our commitment to delivering shareholder value.”
Numis analyst Will Wallis said: “We view the Healthcare sale as positive, even though the price may disappoint some. We did not see the business achieving market leadership, and saw significant ongoing risks.”
Sage Healthcare’s revenue last year was £157m. Gross assets were £393m and the overall loss on the disposal is expected to be between £60m and £70m.
Sage last month lost out in the race to buy Australian software firm MYOB, after it was beaten by a US private equity house.
Bain Capital agreed to purchase the accounting software company for about $1.3bn (£790m), trumping both Sage and private equity outfit Kohlberg Kravis Roberts.
Sage was forced to abandon its bid because of a drop in its share price and a lack of shareholder support, sources said.
The Newcastle-based firm this year returned all of its regions to organic growth for the first time since 2007.
ADVISERS: WILLIAM BLAIR & COMPANY
CO-HEAD OF HEALTHCARE IT
Boutique investment bank William Blair & Company was one of the firms advising Sage on the disposal of its healthcare business.
Heading up the team was the bank’s managing director and co-head of healthcare IT John Kibler.
The banker joined William Blair in 1997 and has worked on a string of high profile transactions, including Allscripts Healthcare Solutions purchase of Eclipsys, Netsmart Technologies’ recapitalisation by Genstar Capital, Trover Solutions’ sale to ABRY Partners and ExamWorks’ initial public offering.
Working alongside Kibler was Karl Palasz, fellow managing director and co-head of healthcare IT, who joined the firm in 1998 and has worked shoulder-to-shoulder on most deals with Kibler. Also working for Sage on the sale were Deutsche Bank and Citi, who were joint corporate brokers.
Legal advice came from magic circle law firm Allen & Overy.