A SOFTWARE firm has agreed a £654m deal to buy a fellow market operator as it seeks to build on rising demand.

Sage Group is taking on US operator Intacct to bolster its presence in the cloud accountancy sector.

Bosses say the move will provide Sage, which employs more than 1,000 workers at its Newcastle headquarters, greater growth opportunities in the cloud market as customers switch from traditional data storage.

The deal was revealed today (Wednesday, July 26), whereupon Sage, which helps small and medium-sized firms control their finances, also announced its third quarter results to June 30.

The figures showed group organic revenue rose 6.3 per cent, though that number dropped to 5.6 per cent when including its North American Payments business, which Sage sold to private equity firm GTCR last month.

Officials also highlighted the continuing success of its subscription offering.

Organic recurring revenue in the nine-month period was up by 9.3 per cent, driven by software subscription growth of 30.6 per cent.

Steve Hare, chief financial officer, said: “Performance continues to be in line with expectations and we remain confident of building on this in the fourth quarter, exiting the year with accelerating momentum.”

Referring to its Intacct deal, which is expected to be completed within weeks, Stephen Kelly, chief executive, added: “This supports our ambitions for accelerating growth by winning new customers at scale and builds on our other cloud-first acquisitions.

“Intacct opens up huge opportunities in the North American market, representing over half of our total addressable market."

Sage’s platforms include the Sage One marque, which helps smaller operators look after accounts and payrolls, and Sage X3, known for supporting firms’ financial, supply chain and production management.