K3 Business Technology Group PLC Sale of subsidiary (4245Q)
February 26 2021 - 2:00AM
UK Regulatory
TIDMKBT
RNS Number : 4245Q
K3 Business Technology Group PLC
26 February 2021
AIM: KBT
K3 BUSINESS TECHNOLOGY GROUP PLC
("K3" or "the Company" or "the Group")
Sale of Starcom Technologies Limited for GBP14.7m cash
K3, which provides mission--critical business software, cloud
solutions and managed services, is pleased to announce the sale of
its managed services unit, Starcom Technologies Limited
("Starcom"), to Node4 Ltd, the UK-based infrastructure and services
company backed by private equity investment firm, Bowmark Capital.
The total consideration for the disposal was GBP14.7 million,
including GBP0.5m cash on the balance sheet, paid entirely in cash
on completion.
The transaction generates a significant profit on disposal, in
excess of GBP10 million, which will be accounted for as an
exceptional contribution to results in the current financial year
to 30 November 2021.
In the unaudited results of the financial year to 30 November
2020, Starcom generated GBP10.2 million in revenues and pre-tax
profits of GBP1.2 million. Its Group net assets at that date stood
at GBP2.5 million.
The management team and staff of Starcom have transferred with
the sale of the business together with its 280 customers. Under the
terms of a transitional services agreement Starcom will continue to
provide K3 and its customers with managed services for at least
three years.
The disposal proceeds significantly strengthen K3's balance
sheet eliminating net debt. At 30 November 2020, net debt
(including shareholder loans of GBP3.0m (2019: GBPnil)) stood at
GBP2.3m (2019: GBP2.4m), reflecting a seasonal low point following
strong cash receipts from annual renewals between September and the
financial year end, and, in 2020, also benefitting from HMRC
deferrals of GBP2.0, which will unwind in 2021.
Results for the year end 30 November 2020 will be released on
the 30 March 2021.
Adalsteinn Valdimarsson, CEO of K3 Business Technology Group
plc, commented:
"Node4 is an excellent new home for Starcom with its focus
exclusively on managed services, and the deal enables us to
accelerate our strategy of growing own IP product revenue. We wish
Starcom great success for the future."
Andrew Gilbert, CEO of Node4 Ltd, commented:
"We are excited to be working with the Starcom team and their
customers, with our shared mission of helping businesses with
cloud-led managed services. We would like to thank K3 for working
with us during the acquisition and are looking forward to
continuing the relationship by providing industry leading managed
services"
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Enquiries:
K3 Business Technology Adalsteinn Valdimarsson, T: 0161 876
Group plc CEO 4498
Rob Price, CFO
finnCap Limited (NOMAD Julian Blunt/ James Thompson T: 020 7220
& Broker) (Corporate Finance) 0500
Richard Chambers (Corporate
Broking)
KTZ Communications Katie Tzouliadis/ Dan Mahoney T: 020 3178
6378
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END
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