Enterprise software company Sage Group PLC intends to sell its U.S. payroll outsourcing business for 78 million pounds, which is about $100 Million. It is being acquired by U.S. human capital management solutions provider iSolved HCM, a provider of HR management tools to small and mid-sized companies.
The payroll outsourcing unit had an operating loss of 1 million pounds in 2018. Of the total deal value, 73 Million pounds will be paid in cash on completion, while the rest represents contingent consideration. Sage expects to report a profit of about 23 Million pounds through this sale.
This is another step in Sage’s strategy to focus on growing its subscription services by transferring more products to the cloud. Sage Group said that it plans to use the proceeds from the transaction to cut down its debt. The company expects to close the deal within the next three months.