Edinburgh-based software accounting firm FreeAgent has been bought by RBS.

Under the terms of the acquisition, RBS BidCo, a wholly-owned indirect subsidiary of the RBS, own the entire issued and to-be-issued share capital of FreeAgent.

This also means that scheme shareholders will be entitled to receive 120p for each FreeAgent share held – a figure that led to the acquisition being valued at approximately £53m.

Commenting on the news, Andy Roberts, chairman of FreeAgent, said: “The combination of FreeAgent and RBS makes sense for our talented people, for our company’s growth prospects, and for the shareholders who have backed our journey so far.

“For those shareholders, today’s offer represents a 5x multiple on our current revenues as well as a very substantial premium to our IPO price. For the FreeAgent team, it opens up a huge opportunity for them: a chance to target the entire RBS SME client base with a product designed with their needs in mind,” he added.

Freeagent offers accounting software for small business and sole traders with fewer than 10 employees, to try and make it easier to manage company finances. Founded in 2007 by former RAF fighter pilot Ed Molyneux, the software lets users file expenses or invoices, check your cash flow and stay on top of taxes.

Freeagent and RBS are already commercial partners; the bank offers FreeAgent’s accounting software to its business banking customers. Following a pilot in the fourth quarter of 2017, more than 10,000 customers are signed up to use the software.

FreeAgent, which went public on AIM in November 2016, will still operate independently; using its existing management team and maintaining its current Edinburgh location.