Sage buys itself pole position in Germany

UK accountancy software supplier Sage finally purchased its German-based equivalent, KHK, on Friday for #40.1m.

Negotiations between the two suppliers had been going on for some time, but discussions had, until now, stalled over price.

The acquisition of KHK, which is the market leader in Germany with a turnover of around #30m, will make Sage one of the largest European suppliers in the small to medium-sized accountancy software market.

The combined business will turn over about #166m, but KHK will be run as an independent business in Germany.

Paul Walker, Sage's managing director, said: 'Germany is one of the largest European economies, and gaining a leadership position there was an important part of the jigsaw to strengthen our position in the European market.'

He said that KHK's products would not be made available in the UK because they were specific to the local German market, but that products currently under development may be sold into Eastern Europe.

Sage would also consider making acquisitions to break into other geographical markets, such as the US, he added.

Jyoti Bannerjee, managing director of consultancy Tate Bramald, considered the move to be positive, because he believes companies need a global presence to survive.

'This is one more step in the consolidation of the market. These days, if you don't do anything about going international you suffer and someone buys you. But the deal has simply consolidated Sage's position in the small-to-medium-sized business market, not changed it,' he said.