ACCOUNTANCY software group Sage is hoping to expand its share of the lucrative US market after putting in a £63.9m bid for Oregon, firm Timberline.

The Newcastle IT firm has agreed a deal with the US company but still needs shareholder backing.

The offer surprised the London Stock Exchange as the price-tag offers Timberline shareholders a premium of one third on top of the NASDAQ-listed stock's closing price on Wednesday night.

Analysts said the acquisition did not appear to live up to Sage's previous record of buying smaller businesses for which the proportion of costs which can be stripped out after becoming part of a larger group is relatively high.

But Sage said the acquisition made good business sense and fitted with its strategy of acquiring locally-developed software brands.

Timberline, which has 20,000 customers, provides accounting and business management software to small and medium-sized firms in the construction and real estate industries.

If shareholders give the deal the go-ahead, Timberline will become part of Sage's existing US business Best.

Chief executive Paul Walker said: "We expect to create value through selling Timberline's products to our large and growing US customer base, and also through selling additional Sage products and services to Timberline customers."