A listed Salford-headquartered software firm has sold its loss-making Sage business to one of the UK's largest resellers for £1.68m.
K3 Business Technology, which provides business software, cloud solutions and managed services, has sold Sage Business to Pinnacle Computing (Support) Ltd. The deal is expected to be completed in early October.
In the financial year to November 30, 2020, the Sage Business generated revenue of £5.2m and a pre-tax loss of £1m.
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Current recurring revenues are £3.1m with gross profit of £1.5m. Net liabilities stood at approximately £1, at May 30, 2021.
In a statement issued to the London Stock Exchange, K3 said the disposal is in line with the board's strategy of "focusing resources on key higher-margin products and markets", and follows the sale of other non-core businesses.
The disposal proceeds will also "further strengthen K3's balance sheet" and generate a profit pre-tax of approximately £1.6m, which will be accounted for as an exceptional contribution to trading results in the current financial year ending November 30, 2021.
Tom Crawford, chairman of K3 Business Technology Group, said: "The sale of our Sage Business is another step forward as we continue to sharpen K3's focus and simplify its operations around its higher margin core products and strategic markets.
"Following this transaction and other disposals over the last two years, the group is more streamlined, market-focused and strategically better positioned."
James Spencer, managing director of Pinnacle, added: " The Sage Business will transition very smoothly into our operations, benefiting from our scale and depth of focus.
"We are excited for both the team and customers to join Pinnacle to bolster our operations and delivery within the Sage markets."
