Venture capital firm trumps Sage's offer for Visma

A venture capital firm has trumped an offer by British software company Sage Group for Visma, a business-management software vendor based in Oslo.

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Engel Holding, a Norwegian subsidiary of HG Capital, offered on Tuesday about $674 million compared to Sage’s proposed $585 million. In a short statement, Sage said Wednesday it would not top its offer, which expires Thursday.

Sage's offer was recommended by Visma’s board of directors when it was announced last month. But last week, Visma officials said the offer was no longer attractive.

Visma had better-than-expected first quarter results, which may have caused it to spurn Sage's offer, said David Bradshaw, principal analyst at Ovum. Visma reported revenue of $91.6 million from January through March, up from $73 million for the same period in 2005. Net profit rose to $6.5 million, up from $4.4 million.

Visma, which has around 2,350 employees, specializes in business productivity services such as debt collection and employment. It also produces ERP (enterprise relationship management) and CRM (customer relationship management) software.

Visma's board has endorsed the new offer, Bradshaw noted, although no money has exchanged hands, and shareholders must approve the deal.

HG Capital could combine Visma with other software holdings, such as Iris Software in the U.K. and Addison Software and Service in Germany, Bradshaw said. Those companies could form a larger group to compete with Sage in Europe, Bradshaw said.

"The problem that Sage potentially faces is HG Capital could be assembling a competitor in its backyard," he said.