British software company Sage Group offered Wednesday to buy Visma, a business-management software vendor based in Oslo, for £334 million ($585 million).
The offer, which has been recommended by Visma's board of directors, is subject to due diligence. The offer represents a 19 percent premium over Visma's average share price over the last 20 days, according to a news release.
Visma offers business productivity services such as debt collection and employment services, among others. The company, which caters to Scandinavian small and medium-size businesses, fits into Sage's strategy of expanding into new markets, said Paul Walker, Sage's chief executive officer, in a statement.
Visma, which counts 200,000 customers, had revenue of £166 million for the year ending Dec. 31, 2005. Its operating profit before depreciation and amortization was £22 million, according to a news release.
The acquisition would be one of Sage's largest but is a safe play, wrote David Bradshaw, principal analyst for Ovum in London. Sage will be tasked with trying to raise Visma's profits, but the acquisition will allow Sage to move into Sweden, the largest economy in the Nordic region, Bradshaw wrote.
"In the past, software vendors have shied away from anything that looks like a business service because it dilutes their operating margin," Bradshaw wrote in a commentary. "We will be very interested to monitor Sage's progress."
Sage, which says it has 500,000 registered users in the U.K., produces accounts, payroll, and CRM (customer relationship management) software.