Media reports suggest that accounting software provider Sage is among the interested parties bidding for Italian management software manufacturer from private equity firm Bain Capital in a deal that could reach up €650m.

The move is in line with Sage’s build-up strategy –in 2006 the company invested £617.5m in acquisitions including the £307m purchase of Emdeon Practice Services.

The group has a strong position in the traditional off-the-shelf software and is trying to build upt its software as a service (SaaS) capabilities.

But while the Newcastle-based firm may have fallen behind competitors in the SaaS space, it has worked to raise cash and reduce its debt which it is reported to have falledn from £558m in Q1 last year to £280m as at June this year.

Other interested bidders in the auction include private equity firms HgCapital and Cinven.

This is not the first time Sage goes head to head with a private equity firm for an acquisition. Four years ago it lost a bid against HgCapital for Norwegian software group Visma.