Clearwater advises Livingbridge on Panacea sale


K3 Business Technology Group plc (“K3”), the AIM-listed supplier of Microsoft business solutions, has acquired Hampshire-based IT services business, Panacea Limited from Livingbridge.

Clearwater Corporate Finance’s technology team, led by head of technology, Carl Houghton, handled the sale of Panacea on behalf of stakeholder, Livingbridge.

The total consideration for the acquisition was £1.7 million payable in cash with repayment of Panacea’s overdraft of £0.5 million. Barclays Bank provided funding for the deal.

Panacea provides and supports end-to-end business applications, working with partners such as Microsoft, Sage and SAP. Established in 1986, the business was acquired by Livingbridge in May 2006 and has since expanded its application portfolio.

K3, which was established in 2001, is one of the UK’s leading suppliers of Microsoft-based business solutions and a member of Microsoft’s Inner Circle Club, which is reserved for the top 60 partners worldwide. The Salford-based company supplies enterprise resource planning (ERP) software predominantly to the retail, manufacturing and distribution sectors. K3 supports approximately 3,000 customers in over 20 countries.

The deal will further build on K3’s existing product stack, whilst increasing its strong customer base and presence in the South of England. The deal brings together two of Microsoft’s top 10 Dynamics partners in the UK.

Clearwater’s Carl Houghton, commented: “We identified K3 as one of the most likely buyers of Panacea very early on. When there are compelling reasons to do a deal it helps everyone stay the course. The strong fit between the businesses made all the difference.”

K3 CEO, Andy Makeham, said: “I am delighted to announce the acquisition of Panacea. Its addition is strategically important as we drive the growth of our managed services and hosting activities. Panacea not only more than doubles the size of, and extends, our existing hosting and managed services business but also brings us recurring income from a large, high quality customer base.

“While Panacea’s managed services offering is more extensive than K3’s, Panacea has not, as yet, offered application hosting services to its customer base and we see an opportunity to bring our hosting offering to its customers. Uptake of this will add to K3’s recurring annual revenues, which currently accounts for approximately 40% of K3’s total income.”

Mark Turner of Livingbridge, added: “We are delighted that Panacea has been acquired by K3. It represents a strong strategic fit and should enable Panacea to further leverage its customer and product reach.”

To learn more about Clearwater’s technology team click here.

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