K3 Business Technology Group PLC on Monday announced the sale of NexSys Solutions Ltd to private equity investor Advent International through Syspro.

The stock was trading 36% higher at 85.00 pence each late on Monday morning in London.

K3, a Manchester, England-based provider of business-critical software solutions for fashion and apparel brands, said total consideration of £36.0 million will be paid in cash for NexSys upon the deal’s completion.

This represents ‘an attractive valuation’, K3 said, and is at a 28.8% premium to its market capitalisation of around £28.0 million as of Friday.

The company expects to complete the transaction on or around January 8, netting £34.4 million after adjustments and transaction costs.

Manchester-headquartered NexSys, currently K3’s wholly-owned subsidiary in its Third-Party Solutions Division, provides business software solutions for manufacturers and distributors. NexSys ‘is a leading SYSPRO elite partner in the UK’, K3 added.

Derby-based Syspro, K3 explained, is a global enterprise resource planning (ERP) software provider controlled by Advent International funds.

K3 said it expects the remaining group sans NexSys to reach on-month cash breakeven (after the allocation of central overheads) during the first quarter of 2025.

‘The directors believe that NexSys is an excellent strategic fit with SYSPRO and that the business, customers, operations and staff of NexSys will be well served under Advent’s ownership and as part of its wider SYSPRO offering, and as a larger global business,’ K3 commented.

K3 added that once it completes the sale: ‘It is anticipated that a substantial proportion of the proceeds from the disposal will be returned to shareholders in the first half of 2025...The remainder of the proceeds will be kept within the group for working capital purposes and to ensure that the remaining parts of the group are appropriately funded.’

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