Monday, November 18, 2019
Global payments acquirer Elavon, subsidiary of U.S. Bancorp, disclosed Nov. 17, 2019, that it entered into a definitive agreement to acquire Sage Pay, a U.K.-based payment gateway and division of The Sage Group, a cloud solutions provider. The $300 million agreement is expected to close in 2020, subject to regulatory approval, Elavon representatives stated.
Declan Lynch, CEO of Elavon Financial Services DAC, is optimistic that the newly formed entity will accommodate Sage Pay assets and staff. Elavon Financial Services DAC, doing business as Elavon Merchant Services, is regulated by the Central Bank of Ireland and the Prudential Regulation Authority. “We are thrilled to bring the talents and capabilities of Sage Pay employees to Elavon, where they will be an integral part of our company that is investing in the future,” he stated.
Hannah Fitzsimons, president and general manager of Elavon Merchant Services, Europe, agreed the merger will benefit employees and clients and indicated the move is consistent with a broader strategy to expand Elavon’s technical capabilities and global footprint. “We are a customer-focused company that is helping businesses succeed in a global marketplace that is changing rapidly,” she said. “This acquisition brings tremendous talent and leading technology to Elavon, which can be leveraged across the European market.”
Payments analysts have observed that the Sage Group’s product and service offerings for small and midsize merchants have become popular in the United Kingdom and Ireland. Established in 1981, the company has 13,000 employees and serves more than 3 million merchants in Europe, Africa, Australia, Asia and Latin America.
The Sage Group has grown, both organically and by acquisition, most recently with the 2017 Intacct and Fairsail acquisitions. Sage launched Sage Business Cloud in 2018 and publicly disclosed it would sell off its Sage Pay processing unit in September 2019, according to LaToya Harding. The U.K. journalist noted that more than half of all British companies use Sage accounting software, HR and payroll products.
In a Sept. 9, 2019, post in The Telegraph, titled, “Sage Group in talks to offload payment processing unit Sage Pay,” Harding revealed that Sage Group had hired Rothschild & Co. to find a buyer for its payment gateway, which reportedly serves about 50,000 small and midsize merchants. “The FTSE 100 software company, which disposed of its payroll division earlier this year and its US payments software business in 2017, said it was ‘evaluating potential strategic options’ for the business, including a sale,” she wrote.
Elavon’s Sage Pay acquisition will ostensibly improve the company’s market share in the U.K. and Ireland and round out its technology suite with a secure international gateway that facilitates multiple regions, currencies and payment methods, the company stated. The Sage Pay product suite includes card present, ecommerce, phone and invoice payment solutions. Subscription-based service models are available for small and midsize merchants; the company also provides tailored commercial payments solutions to enterprise-scale organizations in a variety of business sectors, Sage Pay representatives stated.
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