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Sage set to acquire PayChoice

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Sage is set to acquire the payroll provider PayChoice in a deal that will cost an upward of $157.8 million in cash.

Sage North America, makers of business and accounting-related software and New Jersey’s PayChoice are expected to close the deal in October.

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PayChoice is an online self-service approach that provides an outsourced service for employers with up to 10 employees to process payroll and human resource activities.

The employers just key in the information necessary to process payroll and make funds available. It will then make the necessary federal, state and local filings and tax payments on their behalf.

For employers with more than 10 employees, PayChoice provides full service payroll and human resource service. It helps manage the employer’s benefits offerings such as retirement plans and insurance.

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The human resource services it offers to employers relate to onboarding and human resource compliance.

PayChoice also has a white label offering for firms such as financial services that want to market a payroll service under their own brand. It has been in business for 20 years having a customer base of 100,000 comprising of small and medium business customers.

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Pascal Houillon the president and CEO of Sage North America said that PayChoice is an excellent business having an attractive cloud platform, strong management team and proven business model based on supporting the needs of small and medium sized businesses and licensees.

But why is Sage acquiring PayChoice? Sage already has payroll and HR solutions but these offerings are mainly add-ons to its software.

PayChoice will therefore expand these offerings in the form of an outsourced service and one that can be used independent of the accounting software that the employer uses.

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According to a statement from Sage North America the acquisition “… strengthens the Sage value proposition to customers with a more robust and comprehensive offering. The combined portfolio provides attractive growth opportunities, particularly through new customer acquisition and cross-sell to the combined customer base.”

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