Sage buys PayChoice for $157.8 million, bolsters SMB base

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Sage on Monday said it will acquire PayChoice, which provides cloud based payroll software for small businesses, for $157.8 million.

The deal is expected to close in October.

For Sage, an enterprise resource planning software provider, PayChoice bolsters its US payroll business. Sage is based in the UK but has significant operations in North America. 

Like other enterprise software players, Sage is trying to move toward a cloud subscription model over licensing and maintenance. PayChoice, which uses software as a service as its model, will give Sage recurring revenue and a set of cloud customers.

Privately held PayChoice is profitable, according to Sage. PayChoice is based in New Jersey and has 260 employees with 16 offices in the US. The company, which has 2013 revenue of $38.9 million, counts more than 100,000 SMBs as customers.

PayChoice charges $49.95 a month for self-service payroll for companies with less than 10 employees. Pricing for larger companies and full service depends on number of employees as well as fees for a pay run. A full service customer with 11 employees and a bi-weekly payroll run would pay about $59.95.