BUSINESS software group Sage yesterday continued its European expansion, with a £55m deal for a Spanish firm.

Sage, which employs 1,200 staff at its Newcastle headquarters, bought software vendor Logic Control. The acquisition is expected to be complete by the end of next month.

Logic provides business management solutions for small and medium-sized businesses, including accounting and payroll software.

It has more than 20,000 customers and made £3.8m profit in 2004, off turnover of £28.2m. It also had cash assets at the year end of £20.6m

Paul Walker, Sage chief executive, said: "Acquiring Logic Control strengthens our product offering in Spain.

"Logic Control brings more sophisticated mid-market solutions, along with new solutions for accountants, that we can offer to our large customer base of over 180,000 businesses."

Last month, Sage unveiled half-year pre-tax profits of £100.6m. The only technology group in the FTSE 100 index, it employs 8,000 people worldwide, including 1,200 people at Newcastle Great Park.

Its customer base stands at 4.5 million businesses.