LONDON (ShareCast) - (Sharecast News) - Software and cloud services provider K3 Business Technology announced the sale of the business and assets of its non-core Sage business to existing Sage reseller Pinnacle Computing Support for £1.68m cash on completion on Monday.
The AIM-traded firm said completion was expected in early October, following a TUPE consultation process around the transfer of Sage business employees to Pinnacle, with the consideration is subject to a downward adjustment of around £0.2m to cover any restructuring costs that Pinnacle could incur immediately following completion.

In the financial year ended 30 November, the Sage business generated revenue of £5.2m and a pre-tax loss of £1m.

Current recurring revenues totalled £3.1m, with gross profit of £1.5m, while net liabilities stood at about £1m as at 30 May.

The board said the disposal was in line with its strategy of focusing resources on key higher-margin products and markets, and followed the sale of other non-core businesses.

K3 said the disposal proceeds would further strengthen its balance sheet, and generate a pre-tax profit of about £1.6m, which would be accounted for as an exceptional contribution to trading results in the current financial year ending 30 November.

"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," said chairman Tom Crawford.

"Following this transaction and other disposals over the last two years, the group is more streamlined, market-focused and strategically better positioned."

At 0800 BST, shares in K3 Business Technology Group were up 0.39% at 177.19p.

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