British software firm Sage Group said this morning that it will buy the remaining 83 per cent stake in cloud-based software provider Brightpearl it does not already own for about $299 million (£225m).

London-listed Sage Group, which already owns a minority stake in Brightpearl, said the deal will be funded using existing cash and liquidity.

The acquisition of Brightpearl accelerates Sage’s strategy for growth, including scaling Sage Intacct, broadening the value proposition for mid-sized businesses and expanding Sage’s digital network.

A promising future for Brightpearl

With operations in the US and the UK, Brightpearl provides a SaaS-based retail operating system, enabling real-time business insights and helping customers automate workflows to save time and money. The combination of Sage Intacct and Brightpearl hopes to create a powerful solution for retailers and wholesalers which integrates financial management, inventory planning, sales order management, purchasing and supplier management, CRM, fulfilment, warehousing and logistics management.

The consideration for the 83 per cent of Brightpearl that Sage does not already own is $299m (£225m), which will be funded from Sage’s existing cash and available liquidity.

For the year ending December 2021, Brightpearl is expected to generate revenues of $27m (£20m), representing growth of around 50 per cent compared to the prior year, and to achieve operating profit around the breakeven level.

" Together, Sage and Brightpearl will remove the barriers that hold back retailers and wholesalers, streamlining their systems and enabling them to focus on growth. "

— Steve Hare, Chief Exec of Sage

The transaction is subject to regulatory clearance in the US, and is expected to close in January 2022.

Steve Hare, chief exec of Sage, comments, “Sage’s purpose is to knock down barriers so everyone can thrive. Together, Sage and Brightpearl will remove the barriers that hold back retailers and wholesalers, streamlining their systems and enabling them to focus on growth. I’m delighted to welcome Brightpearl, its management team and colleagues to Sage, and look forward to executing on our strategic priorities together and delivering accelerated growth.”

Derek O’Carroll, chief exec of Brightpearl, adds, “We are thrilled to be joining Sage. Bringing our two teams together will combine the retail strength of Brightpearl and the scale, brand and financial expertise of Sage, enabling us to offer customers the most innovative financial and retail operating solutions so they can grow fearlessly, save time and deliver outstanding experiences.”

Oliver Richards, Partner at MMC Ventures, the leading UK Series A investor, tells us, “Today’s acquisition is testament to the growth of one of the UK’s leading tech success stories and a business that has levelled the playing field for retailers online. Brightpearl has transformed the way mid-market retailers, high growth brands and wholesalers manage their operations seamlessly between physical and e-commerce platforms. MMC Ventures is proud to have supported the business since 2014 when we led the Series A and helped build the team, the board and the growth strategy.”

“This deal closes a hugely successful year for UK tech and MMC Ventures, following the recent acquisition of Interactive Investor by abrdn and prior to that the acquisition of Current Health by Best Buy. We continue to back the most ambitious entrepreneurs across Europe at Series A and look forward to watching the Brightpearl team prosper within Sage.”

Shona Wright

Shona covers all things editorial at TechSPARK. She publishes news articles, interviews and features about our fantastic tech and digital ecosystem, working with startups and scaleups to spread the word about the cool things they're up to. She also oversees TechSPARK's social media, sharing the latest updates on everything from investment news to green tech meetups and inspirational stories.