Sage shares surge from Peachtree buyout

Shares in Sage, the Newcastle-based accounting software company rocketed on the London Stock Exchange this morning following the company's acquisition of US software firm Peachtree for $145m.

The company's share price immediately rose by 77.5p to £20.40 late yesterday and have continued their climb this morning with another rise of 85p to £21.25.

Sage, which hopes to grow its customer base to two million users following the acquisition is particularly keen on winning business in the entry level market. Peachtree sells primarily to small businesses in the US and has added 500,000 users to its customer base in the last two years.

Paul Walker Sage's chief executive said "Peachtree provides us with a strong presence in the entry level US accounting software market," and added that it would complement and not deflect its interests in the higher end accountancy market through State of the Art, the company it acquired in March 1998.

"It's the usual Sage 'stick to the knitting'," said Richard Holway, independent IT financial analyst and author of The Holway Report. "It's absolutely right and fits so well with State of the Art," he added.