£36m deal strengthens technology group’s European presence
Software company K3 Business Technology has sold its NexSys subsidiary to Derby-based ERP software provider SYSPRO for £36m.
The sale price is huge premium on the market cap of K3, which stood at approximately £28m at the close of play last week.
The remaining parts of K3 will become month on month cash break even, after full allocation of central overhead, during the first quarter of 2025.
Net proceeds will be returned to shareholders during the first half of 2025, with a chunk retained within the group for working capital and restructure funding purposes.
The logic to the deal is that K3’s value has suffered from the variance between the different parts of the business.
NexSys is described as third-party solutions division which “provides, integrates, implements and supports business software solutions for manufacturers and distributors”.
It is headquartered in Manchester and currently employs approximately 80 people and K3 said it accounts for the Group’s current second-half bias in terms of earnings and cash inflows, with annual software licence fee and maintenance and support contract renewals occurring in the Group’s fourth quarter.
Eric Dodd, chief executive officer of K3 Business Technology Group, said: “As the UK and Ireland’s largest reseller of SYSPRO software, our NexSys business is a superb fit for Advent, and we are delighted to have reached this agreement. Advent is a leading technology investor and its purchase of NexSys is a natural next step following its recent acquisition of a majority holding in SYSPRO. Advent has the resources and market experience to more fully capitalise on NexSys’s strategic value.
“We view the proposed sale as an excellent outcome for K3 shareholders, NexSys, and Advent and recommend that shareholders vote in favour the proposed sale at the Company’s General Meeting in December.”
Jaco Maritz, chief executive officer of SYSPRO, said: “SYSPRO, an Advent and Safari company, believes that NexSys is a compelling strategic fit given the company’s position as a trusted provider of digital solutions to manufacturing and distribution companies across the UK and Europe.”
“The carve-out acquisition is a key milestone in Safari’s SYSPRO strategy to expand its global footprint, strengthening its presence in the UK and extending its reach across Europe. The acquisition will also enable SYSPRO to expand its highly regarded digital manufacturing suite with new products and capabilities.”
“Safari believes there are further initiatives that would help accelerate its existing strategy and which it intends to confirm after a detailed review of the business and operations following Completion. Safari and SYSPRO attaches great importance and value to the skills, experience and commitment of the existing management and employees of NexSys.”
