Sage adds to its payroll by acquiring cloud firm PayChoice

Sage is to acquire privately-held PayChoice, a provider of payroll solutions for small and medium-sized businesses (SMBs). The cost of the takeover is believed to be around £100 million.

The acquisition, said Sage, will extend its portfolio of offerings to now provide "easy to use" online payroll solutions with "seamlessly integrated services".

New Jersey-based PayChoice says it provides full-service and self-service payroll and HR services to more than 100,000 SMBs in the US, and has been serving the SMB market for more than 20 years.

PayChoice services are delivered in real time via the cloud, providing flexibility and scalability as smaller businesses grow and their needs change, said Sage.

"With the acquisition of PayChoice, Sage will take an industry-leading position for online payroll solutions to small businesses, accountants and financial institutions," Sage said. The transaction is expected to close in October.

Pascal Houillon, president and CEO of Sage North America, said, "PayChoice has a strong management team, attractive cloud platform and a proven business model based on supporting the needs of small and medium-sized businesses and licensees. We are delighted to welcome the management and staff of PayChoice to Sage."

Sage said payroll and compliance with constantly changing employer regulations are two consistent challenges for SMBs. It said the acquisition will enable it to provide "intuitive" payroll solutions as well as integrated ancillary services, such as tax filing and direct deposit as part of the company's core offerings.

This would make it easier for SMBs to consolidate and review business data, manage relationships, and simplify day-to-day operations, said Sage.

Peter Roe, an analyst at TechMarketView, said, "We consider that a strategy of acquisitions to build market position, drive cross-selling and accelerate growth would be a good use of some of Sage’s cash."

Earlier this year, Sage Group acquired Exact Software Deutschland, the German payroll business, for around £13 million.

Copyright © 2014 IDG Communications, Inc.

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