Sage Group Plc is preparing for a quotation on the Full List of the London International Stock Exchange list with the prospectus being launched this Thursday. The flotation will be via a placing of 25% to 30% of its equity, and the company hopes to raise almost UKP5m, mostly for existing shareholders, wanting to cash in. Just under UKP1m will be new money. This is effectively the third attempt to come to market for the Newcastle-Upon-Tyne based personal computer accounting packages specialist, which attempted an unsuccessful reversal into Compsoft Plc in 1987, and aborted a planned placing later that year in the wake of Meltdown Monday. This placing is being handled by J Henry Schroder Wagg & Co; Grosvenor Venture Capital, one of the original investors, is realising part of its investment, as are members of the management team. In a placing, the price for the shares is set by consenting institutions in private, but observers expect the sponsors to get the shares away on a double digit multiple, which would value the company at around UKP20m if the figures for the year to September 30 last come out at the expected UKP3m pre-tax on sales of UKP9m; quoted competitors are on multiples of 14 to 16. Sage’s two main operating subsidiaries are the original Sagesoft and the recent acquisition, Sky Software, specialists in the Unix and Xenix end of the accounting market. Sage bought Sky almost exactly a year ago, and its contribution to turnover was UKP685,000 in the current financial year. Research outfit Romtec reckons that Sage Group has 30% of the personal computer accounting systems market by number, although Sage has yet to address the OS/2 market, preferring to build upgrade paths between its existing Sage and Sterling micro packages to the SkyMaster Unix version contributed by the Sky acquisition. Sage Group has also made inroads to the local area network market, with its second product, Mainlan, a proprietary CSMA/CA network built around an SGS-Thomson Semiconductor chip set, which it sells with multi-user versions of its accounting systems. Mainlan aleady accounts for almost 20% of turnover, with accounting packages just over 50% and maintenance, stationery and supplies bringing in the remaining 30%.
