SME software provider K3 to acquire Danish tech firm in £7.9m deal

Manchester-based SME software provider K3 Business Technology Group plc has announced a conditional agreement worth around £7.9m to acquire Scandinavian tech firm Retail Support International ApS.

K3 is set to purchase Denmark-headquartered Retail Support International ApS, known as DdD Retail, for an initial cash consideration of €8.9m (around £7m) and a further €1.1m (£900k) dependent upon agreed performance targets.

To fund the acquisition and take advantage of new product opportunities, K3 has placed 4,090,909 new shares in a bid to raise £13.5m.

In the year ending December 31 2015, DdD reported an EBITDA of €1.08m (around £850k) and revenues of €6.23m (£4.9m).

K3 chairman Lars-Olof Norell said: “We are very pleased to announce the acquisition of DdD which marks an important step in our strategy to increase sales of products with a significant element of K3-owned IP.

“DdD is a well-established business which has developed a highly attractive, cloud-based software solution for retailers, particularly in the fashion sector.”

He continued: “This acquisition represents a highly complementary fit, bringing IP and an extensive customer base delivering significant recurring revenues. We also see exciting cross-selling opportunities.

“We look forward to the management team joining the Group and are also delighted that our placing to raise £13.5m has been well supported by both existing and new institutional investors.”

K3 will continue to seek out “complementary bolt-on acquisitions”, Mr Norell said, and drive development by refining its offer.

Following K3’s latest acquisition, the management team at DdD will remain in place.