Sage has begun the New Year with an acquisition, purchasing US-based merchant services business Verus for £184m, paid in cash.

Verus serves 101,000 SMEs in the US, including speciality retailers, petrol stations restaurants and car dealerships.

The business posted a £12m operating profit for 2005, on £36m revenues.

Sage expects that a demand for linking payment processing services with back-office accounting software provides a 'long-term revenue opportunity' for the business.

'Acquiring Verus expands our business management solutions into a new and growing market, where SMEs are showing clear demand for more automation of their business processes,' said Sage chief executive Paul Walker.

The acquisition should be completed by the end of the month, subject to regulatory approval.

Sage's share price currently stands at three-quarters of a percent up since trading began this morning, to 259.5p from 257.5p.

The FTSE100 giant announced in November that it had a potential £500m 'war chest' for acquisitions.