K3 continues to downsize with sale of Sage units
K3 Business Technology continued to divest its non-core businesses by selling its Sage business for £ 1.68million.
Pinnacle Computing took over the business, strengthening its position as one of the largest players in the Sage channel in the UK.
The deal is expected to be finalized next month, following a TUPE consultation process regarding the transfer of employees. During the fiscal year ended November 30, 2020, the Sage business generated revenue of £ 5.2 million and pre-tax loss of £ 1 million. Current recurring revenue is £ 3.1million, with gross profit of £ 1.5million. The net liability stood at approximately £ 1million as of May 30, 2021.
For K3, this is the last sale as part of a strategy followed by the Board of Directors for several years. In April 2020, the retailer placed its loss-making UK Dynamics activity under administration, leaving the group to focus on profitable base units. The company continued to reduce its portfolio with the sale of Starcom Technologies in February 2021, for £ 14.7million, to Node4.
K3 expects the sale to strengthen its balance sheet and generate a pre-tax profit of approximately £ 1.6million, which will be recorded as an exceptional contribution to the business results for the current year, ending 30 November 2021.
“The sale of our Sage business is another step forward as we continue to refine K3’s focus and simplify operations around its higher margin core products and strategic markets,” said Tom Crawford. , president of K3 Business Technology Group.
“Following this transaction and other divestitures over the past two years, the group is more streamlined, market-oriented and better positioned strategically,” he added.
Platinum partner Sage Pinnacle has used the acquisition as a way to expand its presence in the past, in particular by taking over specialist units in Sage.
Earlier this summer, the company moved to TMS Scotland’s Sage business, based near Falkirk, adding more depth to its operations north of the border.
Mountain peak Managing Director James Spencer said the acquisition would add more depth to its business. “The Sage company will transition very easily into our operations, benefiting from our scale and depth of focus,” he said. “We are delighted that the team and customers are joining Pinnacle to strengthen our operations and deliveries to Sage markets. “