K3 Agrees to Sell NexSys Subsidiary for £36m
Deal News | Dec 02, 2024 | Business Cloud
K3 Business Technology Group, a Manchester-based tech company, announced a strategic agreement to sell its NexSys Solutions subsidiary to global ERP software provider SYSPRO for £36 million in cash. The transaction forms part of a comprehensive strategic overhaul intended to streamline K3's operations and boost cash generation. NexSys, with a 40-year track record in ERP solutions, is set to enhance SYSPRO’s reach in the UK and across Europe. The deal, which represents a significant 28.8% premium over K3’s market capitalization, is anticipated to finalize by January 8, 2025, pending shareholder approval. Proceeds from the sale, amounting to approximately £34.4 million, will partly be redistributed to shareholders, with the remainder bolstering K3's working capital. SYSPRO aims to leverage this acquisition to expand its digital manufacturing suite, while emphasizing the retention of NexSys’s skilled workforce.
Sectors
- Software & IT Services
- Fashion & Retail
- Manufacturing
Geography
- United Kingdom – Both K3 and NexSys are headquartered in Manchester, UK, playing a pivotal role in the transaction.
- Europe – SYSPRO's strategy includes expanding its presence across Europe using the acquisition of NexSys as a key step.
Industry
- Software & IT Services – K3 and SYSPRO are both involved in providing software solutions such as Enterprise Resource Planning (ERP), which is central to the article.
- Fashion & Retail – K3 provides made-to-measure software solutions tailored for the fashion and retail industry.
- Manufacturing – NexSys, the subsidiary being sold, focuses on providing ERP solutions to manufacturers and distributors.
Financials
- £36 million – The cash amount SYSPRO is paying to acquire NexSys Solutions from K3.
- £34.4 million – The net proceeds from the sale projected to be returned to K3 shareholders and retained for working capital.
- 28.8% – The premium over K3’s market capitalization that the sale of NexSys represents.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| K3 Business Technology Group | Selling Company | Company | A Manchester-headquartered company providing made-to-measure software solutions for the fashion and retail industry. |
| NexSys Solutions | Target Company | Company | A subsidiary of K3, specialist ERP solutions provider, and an SYSPRO elite partner in the UK. |
| SYSPRO | Bidding Company | Company | A global ERP software provider acquiring NexSys to expand its footprint in the UK and Europe. |
| Eric Dodd | CEO of K3 | Person | CEO of K3 Business Technology Group, overseeing the sale of NexSys. |
| Jaco Maritz | CEO of SYSPRO | Person | CEO of SYSPRO, involved in the acquisition of NexSys. |