Sage has acquired a 75 percent stake in Folhamatic, a Brazilian supplier accountancy software, for £125 million.

The remaining 25 percent stake will be retained by founder and CEO of Folhamatic, Mauricio Frizzarin.

The acquisition is part of Sage’s strategy to expand in emerging markets, with Folhamatic the leader in the Brazilian SME market. The company counts13,000 accounting firms, out of around 78,000 in Brazil, and 46,000 businesses as customers.

Guy Berruyer, CEO of Sage, said: “[This acquisition] provides us with a market-leading position in the large and rapidly growing Brazilian market. We are excited about the growth opportunity that the combination of Sage and Folhamatic creates in this market.”

Folhamatic has a subscription-based revenue model, with 80 percent of its revenue generated on a recurring basis. Its turnover was £42 million last year with an EBITA of £6.5 million.

TechMarketView analyst Anthony Miller said that he hoped it was a sign of a brighter future for Sage.

“This is Sage back to doing what Sage does best – buying a leading accounting software player in a strategic territory – and about time too!

“Sage entered the Brazilian market in September 2007 through the acquisition of Paris-based cash management software firm XRT. But the acquisition of Folhamatic puts Sage firmly on the map in Latin America’s largest economy,” he said.

Julian Yates, analyst at Investec, agreed with Miller.

“Clearly, growing by acquisitions makes sense to Sage, which is putting increasing focus on the top line. Brazil is a highly attractive market, both in terms of the growth backdrop, but also relative to the low level of software penetration against a complex tax regime.

“We would expect the business to continue to show strong growth.”