K3 sells off Sage Business for £1.68 million

Two hands shaking over a desk

Software solutions provider K3 has announced the sale of its non-core Sage Business to Pinnacle Computing for £1.68 million.

The deal is expected to be completed in early October 2021, following a TUPE consultation process for the transfer of employees to Belfast-based Pinnacle. The disposal consideration is also subject to a downward adjustment of £200,000 in respect of any restructuring costs that Pinnacle may undertake immediately following completion of the transaction.

Announcing the move, K3 said the sale falls in line with its Board’s strategy of focusing resources on key higher-margin products and markets, with the proceeds set to further strengthen K3’s balance sheet.

"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,” commented Tom Crawford, chairman of the K3 Business Technology Group.

“Following this transaction and other disposals over the last two years, the Group is more streamlined, market-focused and strategically better positioned."

In the previous financial year ending in November 2020, Sage Business generated revenue of £5.2 million, registering a pre-tax loss of £1 million. The division’s current recurring revenues stand at around £3.1 million with a gross profit of £1.5 million. Net liabilities totalled £1 million as of 30th May 2021.

Its sale is predicted to generate a profit pre-tax of around £1.6 million, which K3 says will be accounted for as an exceptional contribution to trading results for its financial year ending in November.

James Spencer, managing director of Pinnacle, said Sage Business and its new parent company will fit together well.

"The Sage Business will transition very smoothly into our operations, benefiting from our scale and depth of focus,” he said. “We are excited for both the team and customers to join Pinnacle to bolster our operations and delivery within the Sage markets"

Daniel Todd

Dan is a freelance writer and regular contributor to ChannelPro, covering the latest news stories across the IT, technology, and channel landscapes. Topics regularly cover cloud technologies, cyber security, software and operating system guides, and the latest mergers and acquisitions.

A journalism graduate from Leeds Beckett University, he combines a passion for the written word with a keen interest in the latest technology and its influence in an increasingly connected world.

He started writing for ChannelPro back in 2016, focusing on a mixture of news and technology guides, before becoming a regular contributor to ITPro. Elsewhere, he has previously written news and features across a range of other topics, including sport, music, and general news.