Edinburgh-based accounting software specialist FreeAgent has been bought by a subsidiary of Royal Bank of Scotland for £53 million.
RBS BidCo will acquire the entire issued and to be issued ordinary share capital of FreeAgent. Shareholders will be entitled to receive 120 pence in cash for each FreeAgent Share held.
The bailed-out banking group RBS intends to continue to use the FreeAgent brand in tandem with its existing Royal Bank of Scotland and NatWest brands. The banking group intends to operate FreeAgent as an operationally independent member of the RBS Group, retaining FreeAgent's existing management team and maintaining its current Edinburgh location.
FreeAgent is aimed at UK micro-businesses (defined as sole traders and companies with fewer than ten employees) and their accountants. It was launched in 2007 by former RAF fighter pilot Ed Molyneux, who holds the role of chief executive, and the firm joined London’s Alternative Investment Market in November 2016.
Molyneux said: "Today's announcement represents the beginning of a new and exciting chapter for FreeAgent. Our vision is 'making businesses happier and more successful by putting them in control of their finances' and this moves us closer to that vision.
"Having developed a strong strategic partnership with RBS and with over 10,000 of their business banking customers having already signed up to use FreeAgent's accounting solution, we look ahead to the next chapter, where we will accelerate and further extend our technology capabilities as part of a bigger group. Our working together represents a really compelling opportunity and hence the board is intending to recommend the offer, which we believe makes both good strategic and financial sense."
Ross McEwan, chief executive officer of RBS, said the group is pleased to have reached an agreement on a recommended acquisition of FreeAgent. "Since the beginning of our partnership, we have been impressed by FreeAgent and its technology, and are excited by the enhanced offering we will be able to provide to our customers. We believe that a technology-enabled solution for our business banking customers will make it easier for our customers to build their businesses safely and securely."