K3 fashions Dutch swoop as profits rise
SUPPLY chain software specialist K3 Business Technology has announced its second deal within the last week as it snapped up a Dutch firm for £1.2m.
The Manchester company is buying the trade and certain assets of Rotterdam-based Pebblestone Netherlands, which provides enterprise resource planning (ERP) software to the fashion industry.
A further €600,000 – around £500,000 will be paid to the vendors over the next five years. The finance for the deal was arranged by Richard Faulkner of Barclays Corporate in Manchester.
Founded in 1995 Pebblestone is wholly focused on the fashion and apparel sectors and supplies Microsoft Dynamics ERP systems to fashion wholesalers and garment manufacturers.
The business has approximately 140 customers, including Levi, Just Brands, Claudia Strater, Van Bommel, Euretco and Supertrash/2StepzAhead.
For the year to December 31 2009 and on a pro forma basis, Pebblestone generated revenues of £3.54m and a pre-tax profit of £490,000.
Pebblestone will be relocated and with AIM-listed K3’s existing Dutch retail solutions business, K3 Nederland (which provides Microsoft Dynamics based business solutions to the retail sector).
K3 says the combination of Pebblestone will help to accelerate the development of K3 Nederland, whose flagship customers include IKEA, while also adding additional strength to the established fashion and apparel sector of the UK retail solutions business.
Andy Makeham, chief Executive of K3, said: “Pebblestone is one of the best known providers of technology for fashion brands in Europe and its acquisition is an exciting development for K3.
“We have an increasing presence in the fashion sector both in Europe and the UK and the addition of Pebblestone will accelerate our strategic growth in this important market.”
Last week K3 bought Scottish firm DigiMIS.
In a trading update for the 12 months to the end of December – published because of a change in its year-end, K3 said revenues had increased 5% to £39.46m and profit before tax was £4.04m, up from £3.94m.
Chairman Tom Milne, said: “Against a difficult economic backdrop, we are very pleased with K3’s performance over the year.”
He sad although markets are likely to remain tough, the outlook for the next six months is encouraging.
“The two acquisitions we have made since the period end, in March 2010, help us to move K3 forward both strategically and at the earnings level. We will continue to seek further complementary acquisitions.
“We continue to view the K3’s prospects very positively,” he added.
