K3 sells its loss making Sage Business to Irish firm
Technology group K3 has sold its Sage Business to Irish competitor Pinnacle Computing for £1.68m.
Completion of the sale to the Belfast-headquartered company is expected to take place next month following a TUPE consultation process of the Sage Business employees to Pinnacle.
The disposal is also subject to downward adjustment of £200,000 in respect of any restructuring costs that Pinnacle may undertake immediately following completion.
In the financial year to 30 November 2020, the Sage Business, one of the UK’s largest resellers of Sage software, generated revenue of £5.2m and a pre-tax loss of £1m.
Current recurring revenues are £3.1m with gross profit of £1.5m.
Net liabilities stood at approximately £1m at 30 May 2021.
The disposal is in line with K3’s strategy of focusing on its higher-margin products and markets, and follows the sale of other non-core businesses.
The sale proceeds will further strengthen K3’s balance sheet, and generate a pre-tax profit of approximately £1.6m, which will be accounted for as an exceptional contribution to trading results in the current financial year ending 30 November 2021.
Tom Crawford, Chairman of K3 Business Technology Group plc, said: “The sale of our Sage Business is another step forward as we continue to sharpen K3’s focus and simplify its operations around its higher margin core products and strategic markets.
“Following this transaction and other disposals over the last two years, the Group is more streamlined, market-focused and strategically better positioned.”
James Spencer, Managing Director of Pinnacle said: “The Sage Business will transition very smoothly into our operations, benefiting from our scale and depth of focus.
“We are excited for both the team and customers to join Pinnacle to bolster our operations and delivery within the Sage markets”