Private equity giant prepares £258m bid for professional services group

John Rigby, chief executive of K3 Capital

American private equity giant Sun European Partners is in “advanced discussions” over a £258m cash offer to buy professional services group K3 Capital.

K3 has revealed it had received expressions of interest from “multiple parties” but only Sun is considering a bid.

A committee of independent directors of K3, led by non-executive chairman Ian Mattioli, have confirmed to Sun Capital that they would be “minded to recommend unanimously the proposal”.

Sun Capital’s 350p-per-share offer is a 17% premium to its closing share price on December 7, and 36% above the six-month volume weighted average price.

Under stock market rules, Sun Capital has until January 5 to announce a firm intention to make an offer.

Bolton-based K3 began life as KBS and had rebranded as Knightsbridge by the time it listed on the Alternative Investment Market in 2017.

It acquired Quantuma and randd in 2020, followed by Knight R&D and Knight Corporate Finance in 2021, then JE Consulting this year.

In September, K3 revealed a 50% increase in revenues, to £71m, with adjusted earnings up nearly one-quarter to £20m.

During the year to May all three divisions of the SME advisor group – tax, business sales, and restructuring – delivered revenues growth and profit and performed ahead of expectations.

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