Acquisition

RNS Number : 2996W

K3 Business Technology Group PLC

18 November 2010

 



AIM: KBT

K3 Business Technology Group plc

("K3" or "the Group")

Announces

Acquisition of Manager Services Provider, Panacea Ltd

K3, which supplies and supports Microsoft-based Enterprise Resource Planning software to the supply chain industry, is pleased to announce the acquisition of Panacea Ltd ("Panacea"), the managed services and IT solutions provider.  The total consideration for the acquisition is £1.7 million payable in cash on completion together with repayment of Panacea's overdraft of £0.5 million.  K3 management views the acquisition as a material development in the growth of its managed services and hosting activities. 

Based in Hampshire, Panacea provides managed services and IT solutions to the distribution, retail and hospitality sectors.  For the year to 31 December 2008, Panacea generated sales of £9.58 million and an underlying operating profit of £0.57 million. Some 47% of annual revenues are recurring and for 2008 totalled £4.5 million, from a customer base of approximately 260, including many well known high street retailers. Panacea's managed services activities account for approximately half its revenues, with the balance largely derived from its Applications Solutions & CRM Division built around Microsoft Dynamics and Sage.

The addition of Panacea more than doubles the Group's existing managed services revenues and extends the range of K3's managed services offering.  Combined K3 and Panacea revenue will total c.£7 million per annum and K3 management also sees the opportunity to offer K3's hosting services to Panacea's 260 strong customer base. 

Andy Makeham, Chief Executive of K3, said,

"I am delighted to announce the acquisition of Panacea. Its addition is strategically important as we drive the growth of our managed services and hosting activities.  Panacea not only more than doubles the size of, and extends, our existing hosting and managed services business but also brings us recurring income from a large, high quality customer base.

While Panacea's managed services offering is more extensive than K3's, Panacea has not, as yet, offered application hosting services to its customer base and we see an opportunity to bring our hosting offering to its customers.  Uptake of this will add to K3's recurring annual revenues, which currently accounts for approximately 40% of K3's total income."

Enquiries:

K3 Business Technology		Andy Makeham, Chief Executive		T: 0161 876 4498
Group plc		David Bolton, Chief Finance Officer
Canaccord Genuity Limited (NOMAD)		Simon Bridges		T: 020 7050 6500
Biddicks		Katie Tzouliadis / Sophie Lane		T: 020 7448 1000

 

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