K3 strengthens retail arm with £1m deal
SOFTWARE group K3 Business Technology plans to increase its foothold in the fashion industry after agreeing to buy more assets of the Pebblestone Group.
In March the Salford-based firm acquired parts of Rotterdam’s Pebblestone for £1.2m.
It has followed this deal by spending £1m on the intellectual property, international sales and customers of the company which develops Microsoft-based enterprise resource planning (ERP) software – a system that can manage everything from stock to till sales.
K3 said Pebblestone’s software, which has been designed specifically for the fashion business, is widely acknowledged in the industry as being a market leader.
The acquisition will strengthen K3’s presence in Europe, said the company, and adds to its, “growing library of IP, which enables the group both to obtain significant margin benefit and deliver an enhanced offering”.
The assets included in the deal generated revenues of £740,000 in the year to December and a pre-tax profit of £185,000. K3 has paid an initial consideration of £700,000 and a further £300,000 is due in 2011 if certain performance targets are met.
Chief executive Andy Makeham said: “We are delighted to have acquired the IP, international distribution channel and customers of the Pebblestone Group.
“This acquisition is a natural and attractive addition to Pebblestone Netherlands, the Dutch distributor of fashion software which we acquired in March.”
He added: “Our ownership of the intellectual property will enhance our margins and bring a useful new income stream from licencees. It also supports our plans to expand in Western Europe.”
