Sage To Acquire Payroll Provider PayChoice





Sage acquiring PayChoice payroll

Sage North America, makers of accounting and related business software, announced today that it intends to acquire New Jersey-based PayChoice for $157.8 million in cash. The deal is expected to close in October 2014.

PayChoice provides an outsourced service for employers to process payroll and human resources activities. For companies with up to 10 employees it’s an online self-service approach. Employers key in the information necessary to process payroll, and make the funds available.  PayChoice makes the necessary state, federal and local filings and tax payments on their behalf.

For companies with 11 employees or more, it provides what it calls “full service” payroll and HR service. In addition to making tax filings, PayChoice also helps manage the employer’s benefits offerings such as insurance and retirement plans. And the company provides HR services for employers relating to HR compliance and onboarding.

PayChoice also has a white label offering for firms such as financial services that want to market a payroll service under their own brand.

PayChoice has been in business for 20 years. It brings a customer base of 100,000 small and medium business customers.

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

Why is Sage Acquiring PayChoice?

Sage currently has payroll and HR solutions in its offering portfolio.  Mainly, however, those offerings are add-ons to the software that Sage offers.  For its Sage 50 product it adds on a payroll software suite. Also, it has a human resources management software offering for midsize businesses.

PayChoice will expand Sage’s offering, in the form of an outsourced service, and one that today can be used independent of the accounting software that the employer uses. PayChoice is used by small businesses of all sizes. And of course, it brings a built-in sizable customer base. A statement by Sage North America’s parent company, Sage Group PLC, notes that 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. PayChoice is a profitable business with a high proportion of recurring subscription revenue.”

According to Robert Digby, CEO of PayChoice, customers will continue to see the same service as before the acquisition.  “Current PayChoice customers will see no change in their level of service as a result of the Sage acquisition.  Like PayChoice, Sage puts tremendous focus on customer experience, and we look forward to sharing best practices to benefit all of our customers. I speak on behalf of the entire PayChoice team when I say that we are excited to join Sage, the possibilities for us and for our customers.”

PayChoice will continue to operate from its offices in New Jersey, according to a Sage spokesperson. Current PayChoice employees will become employees of Sage. No reductions in staff are anticipated directly tied to the acquisition, the spokesperson added.

Editor’s Note: the above was updated to include the statement of the PayChoice CEO about no change in customer service.

Image: Sage NA

2 Comments ▼

Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.

2 Reactions
  1. An accounting firm and a payroll service together? I think it is perfect. Both have clients that can benefit from both at the same time so it is a good acquisition.

  2. The number of acquisitions happening in the small business software industry is crazy. GoDaddy is buying up all kinds of companies. So is Sage. Hubspot just announced a custom CRM. WOW!

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