Sage Group Plc · LSE:SGE
Sage — The Sage Group — Merger or Acquisition (June 2012)
8 slides from Sage's merger presentation, Jun 20, 2012
Slide 1: Acquisition of Folhamatic Group
Acquisition of Folhamatic Group The Sage Group 20 June 2012
Slide 2: Transaction highlights
Transaction highlights • A high growth business in a high growth market − Folhamatic Group enjoys a leading market position in a large and growing economy − Operates in a favourable, highly complex tax and regulatory environment • A complementary business for Sage − A leading provider of accounting,
Slide 3: Why Brazil is an attractive market
Why Brazil is an attractive market • Brazil now the sixth largest economy in the world − Sage revenue in Brazil currently is £3.4m (R$10.8m) • Robust macro-economic environment with a forecast real GDP growth CAGR of 4.6% for 2012-16 (7% nominal)* driven by: Brazil − Large and growing middle class −
Slide 4: Overview of Folhamatic
Overview of Folhamatic • Leading provider of financial, invoicing, payroll and business 2011^ 2012^ software to accountants and SMEs actual forecast Growth in Brazil • Combined with integrated tax, legal Revenue £42.4m £48.8m + 15% and regulatory content to help business achieve legal and regulatory
Slide 5: Transaction structure
Transaction structure • Acquisition of 75% of Folhamatic equity with initial consideration of £101m* (R$322m) payable on completion and further payment, expected to be £24m* (R$76m) • Value of second payment is variable and contingent on financial performance in the year ending 31 December 2012 • Im
Slide 6: Impact on Sage
Impact on Sage Geographic mix • Brazil will represent 3% of group revenue • 14% of total FY12 revenue* originates from outside of Europe and North America FY12* exc. Folhamatic FY12* inc. Folhamatic 11% 3% 11% 30% 59% 29% 57% Europe North America AAMEA Latin America Leverage • Commitment to 1x EBITA
Slide 7: Sage has expertise in driving value from acquisitions like Folhamatic
Sage has expertise in driving value from acquisitions like Folhamatic Softline South Africa acquisition has grown In emerging revenue and EBITA CAGR of 16% and 19% markets respectively since acquisition in 2003 Our largest accountants’ markets, in the UK In accountants’ and France, continue to grow
Slide 8: Summary
Summary • In line with our strategy of expanding in new and high growth markets • Folhamatic has a market leading position in a highly fragmented market • We are excited about the growth opportunity from the complementary combination of Folhamatic and Sage • Founder and CEO retains a significant sha