Not only did Sage not acquire Australian peer Mind Your Own Business (MYOB – see MYOB slips through Sage’s fingers), it is being sued by former MYOB owner Archer Capital, with whom it was in discussions. The claim is for around Aus$130m and a hearing date has been set for December 2 in Sydney. Sage ‘strongly rejects’ the claim.
It is all rather odd but suggests Sage walked away from the deal rather than being out-priced by Bain Capital, the successful private equity buyer, and that it was offering more than Bain ended up paying. Sage could have had second thoughts during the discussions - maybe rethinking the price it initially offered - and pulled away. If it had not formalized its bid the decision claim damages is especially unusual. The nub of the question may be how formal and advanced the talks were. The outcome for Sage is the same – an expansion opportunity that was not closed out.