British Software Firm to Buy State of the Art

Accounting software maker State of the Art Inc. said it is being bought for $263 million in cash by British rival Sage Group--the European leader in accounting software for small to mid-sized businesses. Sage will pay $22 a share for the Irvine-based firm--33% more than State of the Art’s Monday closing price of $16.50. Under the terms of the deal, which has been in the works since December, State of the Art will become a wholly owned division of Sage. It was uncertain whether State of the Art will take on the Sage corporate name. State of the Art, which has 400 employees, including 280 at its headquarters, said it does not expect any layoffs. Wall Street appeared to embrace the news as the company’s stock rose 31%, or $5.19 a share, to close at $21.69 on Nasdaq. More than 3.2 million shares changed hands, compared with the average volume of less than 83,500 shares.