29th Jun 2020 14:43
(Alliance News) - K3 Capital Group PLC on Monday said it has raised GBP30.5 million through share issuance to part-fund the acquisition of randd UK Ltd, a company specialising in securing research and development tax credits for clients, for up to GBP16.8 million.
The consideration for randd acquisition comprises an initial consideration of GBP9.3 million plus a maximum earn out of GBP7.5 million.
K3 Capital, a business sales and brokerage firm, has issued 20.3 million shares at 150 pence per share through vendor placing, company placing and a retail share offer. Shares in Bolton, England-based K3 Capital were down 13% at 152.98 pence each in London on Monday afternoon.
Chief Executive John Rigby has bought 20,000 shares, taking aggregated director participation in the Fundraising to 100,000 shares.
Proceeds from the fundraise will be used to satisfy the deal consideration and the remaining proceeds will be used for further further acquisitions and to satisfy fees payable in relation to the fundraising and the acquisition.
"randd adds a highly complementary capability set to K3 which, allows K3 to diversify into a synergistic market whilst providing both companies with cross selling opportunities," K3 Capital said.
For the year ended July 31, 2019, randd generated revenue of GBP4.3 million and normalised earnings before interest, tax, depreciation and amortisation of GBP2.1 million.
The acquisition of randd is expected to be immediately earnings enhancing for K3 Capital.
K3 Capital CEO Rigby said: "We look forward to continuing with our strategy to build a wider group of growing and complementary professional services businesses to provide UK SME's with high-quality advice across specialist disciplines."
On completion of the fundraise, Rigby commented: "This substantial fundraising allows us to make the acquisition of randd, but the fundraise also significantly strengthens our balance sheet and puts us in a strong position to make further acquisitions of complementary professional services businesses, of which we have identified a number of potential targets which we consider very attractive."
By Tapan Panchal; [email protected]
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