The Sage Group Plc (LON:SGE) have told the market that they have sold their Brazilian business on Monday.
The FTSE 100 listed firm said that the deal had been completed with local management in a deal valued at up to £10 million.
Following its annual results – which were published last year, Sage noted that it was looking to offset its Brazilian operations.
The initial deal will cost £1 million, and there could be a deferred consideration of up to £9 million.
Sage added that the business had decided to restructure their focus and strategy – more towards subscription software services and products.
The firm commented: “This divestiture is part of Sage’s strategy to focus on subscription software solutions that are in or have a pathway to the Sage Business Cloud.”
The deal is expected to be completed within the next two months – and shareholders have been pre-warned that the firm may face a loss on disposal of £15 million.
Sage concluded: “Sage expects to report a statutory non-cash loss on disposal of £15m on completion, of which £11m reflects the reclassification of foreign exchange losses from other comprehensive income to the income statement.”
Sage’s strong start to 2020 slows down
A few weeks back, the firm reported that it had seen strong trading across its North American and European business.
Sage alluded to double digit revenue growth in the first quarter of its financial year, as shares took to the rise.
The firm told the market that it had achieved recurring revenue of £410 million in the three month period ending in December.
Notably, this was 11% higher than before and attributed the growth of software subscription by 25% to £286 million.
Recurring revenue was gained from strong performance in both North America and North Europe, with strong momentum in its financial year continuing.
North America recurring revenue was up 12% to £154 million, and Northern Europe rose 15% to £93 million.
