21st Apr 2015 12:15
LONDON (Alliance News) - K3 Business Technology Group PLC has acquired Willow Starcom Ltd from Access Intelligence PLC for GBP1.8 million in cash, the two AIM-listed companies said in separate statements Tuesday.
The deal, which sees Willow exchange hands free of debt and cash, will bolster K3's earnings in the company's first full year of owning Willow, K3 said.
Willow was established in 1990 and is based in Greater Manchester, in North West England. It is an IT support services company with cloud computing capabilities.
In the year ended November 30, 2014, Willow generated GBP2.7 million of revenue, earnings before interest, tax, depreciation and amortisation of GBP370,000 and pretax profit of about GBP100,000. It had about GBP900,000 of net assets at the end of that year.
"Willow Starcom is a well-established business which generates a high proportion of recurring revenues. It is highly complementary to K3's existing hosting and managed services activities and the business can be very readily integrated. The addition of Willow Starcom will broaden our existing offering within hosting and managed services and brings additional expertise and skills to our team," K3 Chief Executive David Bolton said in a statement.
"We believe that there is significant potential to expand our hosting and managed services activities and this acquisition is part of our strategy to realise that growth opportunity," Bolton added.
Access Intelligence said it will used the proceeds of the sale, excluding costs and GBP460,000 of staff settlement agreements, to support growth.
"The divestment of Willow from the group is in line with the group's strategic focus as a software-as-a-service provider," Access Intelligence Chairman Michael Jackson said in a statement.
K3 shares were up 0.4% at 226.00 pence on Tuesday afternoon, while Access Intelligence shares were untraded and were last quoted at 2.625p.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
ACC.LK3 Business Technology Group