K3 buys cloud computing firm

K3 Business Technology, the listed supply chain software company, is to expand its services with the acquisition of cloud computing firm DigiMIS.

Salford-based K3 will pay around £800,000 through a mix of cash, loan notes and shares, with another £1.32m to be paid through an earn-out arrangement linked to DigiMIS’s performance up to March 2012.

Edinburgh-based DigiMIS provides cloud application services from data centres in London, Edinburgh and New York. Its customer base comprises 14 contracted companies, with operations located across 65 sites internationally. 

In the half year to the end of December DigiMIS had a turnover of £1.25m, generating a pre-tax profit of £0.2m.

K3, which supplies Microsoft systems for the retail, manufacturing and distribution supply chain, said the acquisition would provide it with hosting capabilities, in line with the objective to the company’s managed services offering.

Andy Makeham, Chief Executive of K3, said: ” As demand from our customers for hosted solutions grows, the inclusion of DigiMIS in our service mix will provide us with a clear competitive advantage.
 
“Longer term, this acquisition is another key building block in K3’s strategy to be a provider of end-to-end cloud delivered enterprise solutions to the mid-market.”