A Bradford software company has merged with IT giant Sanderson as part of a multi-million pound deal.

Software designer Megabyte, now in its 30th year of business, has been bought by the Sanderson Group for up to £1.5 million in cash and £2 million in Sanderson shares.

The firm, based on Rooley Lane, Bradford, employs 66 people across the country and turned over almost £4 million last year.

David Sanders, who has led the company since its move to Bradford in 1984, will become managing director of the firm within the group following the merger.

He said: "We have built up a strong client base in the retail market nationwide.

"The software we design has a variety of uses from systems for chip-and-pin technology to warehousing distribution and organisation.

"Sanderson approached us with regards to the measure.

"It is great news for us and will allow us to go from strength to strength, improving our market exposure and allowing us to grow in size.

"The first thing we will be doing is consolidating our market position in Bradford and in our other niche market areas."

Megabyte has carried out some high profile systems work for fast food giant KFC, and has more than 100 customers across the UK and Ireland, including clothing company Boyes and English Heritage.

Megabyte landed the £500,000 contract with the latter in 2005 to develop its stock control and in-store sales systems.

David O'Byrne, the managing director of Sanderson, said: "This acquisition will significantly extend our product offerings in the growing multi-channel retail market and will provide good cross selling opportunities with our existing mail order, retail and distribution operations.

"We are confident that the business will provide a significant contribution to Sanderson in the future as well as providing new revenue streams and greater market opportunities."